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Shahla
Money Managing Guru
Joined: 13 Nov 2004
Posts: 3324
Cash Points ££ 126163.28
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 Posted: Sun Feb 18, 2007 3:29 pm Post subject: Weekly Gold and Silver Technical Analysis Report - 18th Feb |
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Butting heads with that $675 resistance level gold just couldn't get enough steam to get anywhere this past week. Maybe this coming week – or maybe not.
GOLD : LONG TERM On the long term P&F chart we are now at that $675 resistance level previously mentioned. Depending upon which long term chart one uses ($10 or $15 units) will depend upon what level would be considered the break-out. Since I have switched over to the $15 unit charts some time back, due to the high price level of the activity, that break-out would be on a move to the $690 level. As mentioned last week we do have a bullish upside break by gold's lower resistance break so one would be a cautious long term bull based upon that but still waiting for the next confirmation break.
As for the usual indicators, all is in sync on the up side although the price momentum (or strength) is still a little bit weak. The price action has all been above the positive sloping moving average line while the line slope is continuing to turn higher slowly. As mentioned, price momentum is positive but still a little weak. Although the price is butting up against its high of last July the momentum is still some distance below its July high. The volume indicator, on the other hand, has been reaching new highs, even higher than where it was at the time of the price May top. The long term moving average of the volume indicator has started to turn upwards but is still in the early stages.
All in all, having upgraded to the bullish side a few weeks back there is nothing yet in the action to suggest that a reversal is anywhere close, so remaining BULLISH.
GOLD : INTERMEDIATE TERM
I thought I'd show the intermediate term P&F chart along with the weekly Candlestick this week. The P&F shows the rally on-going since its last upside break at the $615 level. There was one period that things looked iffy (in the beginning of this year) but the action stayed above the P&F up trend line and did not give us the confirmation second signal required for a reversal.
We are still in the intermediate term bull market. Shown on the chart is the primary intermediate term up trend line along with the uptrend resistance line (the red dashed line). The action may be said to be trapped in this up trending channel. The latest action has taken gold very close to the upper resistance line and it is getting closer and closer to some kind of rest period or reversal action. As the chart shows, per the P&F any reversal action would have some distance to go to cause concern for a reversal to an intermediate term bear. Also on the P&F chart is that resistance level discussed earlier, at the $675 level.
This P&F action is already there and a move to $680 would break above, however, with the upper channel resistance line so close such upside break may not be meaningful as the long term would still be intact. From all this what one can guess from the P&F chart alone is that we just might breach that $675 resistance but not enough to activate the second long term P&F resistance. What I would see for the next few weeks might be more of a lateral to somewhat of a downside move but still within the shown channel. A final upside long term break would then come after such rest/reaction period.
As for the usual suspects, the intermediate term is all positive with the momentum here showing a little more strength than was shown in the long term chart. The price action has all been above a positive sloping moving average line with the line slope well established on the up side. Momentum has kept pace with the price action and in fact the recent action is just very slightly better having breached its high from the May high level. This may not be quite evident on the weekly chart but is on the daily chart. As for the volume indicator, it is nicely above its positively sloping moving average line and at new high levels for a good positive reading. The daily action, however, may be something else and I will touch on that in the short term commentary.
From all this I have no reason to change my previous bullish position on the intermediate term.
GOLD : SHORT TERM - The short term prognosis is starting to look a little precarious. For the past week or so the price action has had a rough time getting anywhere. Looking over such action and the indicators one gets the feel that we are more into a topping activity than anything else. Although still above its positive short term moving average line the price and moving average have been coming together. Trapped inside an up trending channel the action has also been moving towards the bottom support line. Price momentum is no help. It has been showing weakness in the recent price action.
Although the price has hit new highs during the past week and is higher than its action two weeks ago momentum has not been able to rise to the occasion. It has tracked a lateral motion rather than an up trending one. The daily volume action is also under whelming. As the price moved higher over the past few weeks volume has not been able to improve, although the cumulative effect of rising price along with modest volume is still positive. Based upon the recent action and indicators one must still see the short term prognosis as bullish but with a caveat. Should the action continue to “top out” and close below the short term moving average line and up trending support line, at or below the $664 level, a change in direction would be assumed. |
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