Sunday, January 22, 2017

Gold (GLD) Is Looking Precariously Positioned

Gold ETF GLD has had a fantastic run of late when I made a call late in December to go long/buy. Since then we've had a steady upward channel with little volatility, but that broke down on the 19th and since then it has been bouncing around in a condensing triangle. Looking at the RSI(14) on the 30 minute chart you'll notice a series of lower highs. Unless this breaks upwards I fear GLD will be heading downwards.
It's easy to be pessimistic about GLD. I had a couple of good sell signals back in September which materialized into a major correction followed by a fall below the MA(144) in October and a rejection in late in November. Glancing at the daily charts we are firmly below the MA(144) so any hint of a move downwards needs to be studied carefully. There is an overhead resistance line at around $118.00 which I've noticed, too. If this condensing triangle we are seeing on the 30 minute chart breaks upwards, the next stop should be this overhead resistance area. The problem is that with where things stand now on the daily chart is that everything appears over-bought. If you have profits, it might be prudent to take them.