Gold Set to Climb, According to Profit Confidential Expert215 views 2012-10-08 03:41
Cekerevac also reports that since the break from the
downtrend in late July, any pullback in gold was used as a buying opportunity.
In the article, “Where
Does Gold Trade Next?,” Cekerevac elucidates his thesis from a technical
analysis basis, explaining that he turned quite bullish in late July, as he saw
larger volumes on up days, as well as higher highs and lows. The next test was
the 200-day moving average (MA), he says, which was also successfully breached
and subsequently held.
Cekerevac cautions, however, that because of the fast price
appreciation, the market view on gold might be slightly overextended over the
“On a long-term weekly chart, following the highs in 2011,
gold has seen a neutral to downward market,” says Cekerevac. “However, this
sentiment has just shifted, as gold broke through its resistance line.”
Cekerevac believes that this now opens up the possibility of
a retest of the high just above $1,900 per ounce. He also highlights that on
the long-term chart, there is not an overbought condition evident in the Relative
Strength Index (RSI).
“This means that, while a pullback in gold over the short term might be possible, over the long term, it is not yet a worry that this move will be overextended,” concludes Cekerevac.
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