A Quick Look at the Gold Sector
posted May 3, 2005 at 09:09PM
The positive divergences, oversold conditions and relative stability of gold equities today in the face of falling bullion have the quick triggered going in hoping for a bounce which at the least will move back up to the prior trend-line (now resistance).
This bounce trade is totally dependant on bullion maintaining trend-line support. If that triangle breaks down then the whole sector will have the technical look of undergoing a secular trend change, and oversold on the daily won't mean as much.
A more conservative approach is to see if short term trend-line resistance is taken out first. Even more cautious is to wait for at least the bullion triangle to resolve itself in one direction or the other.
It is good to be back,
Good trading all,