Sept. 12, 2012, 7:45 a.m. EDT
Gold passes test and still has room to run
By L.A. Little
Marketwatch.com
Approximately one month ago, I penned my inaugural piece on MarketWatch focusing on what neoclassical technical analysis is all about. The same day, I happened to publish a piece about Royal Gold and the coming breakout in gold stocks on Minyanville.
The point of this latter article was that a head of steam was building under gold stocks, and they looked ready to explode higher. Royal Gold /quotes/zigman/20636/quotes/nls/rgld RGLD -0.73% was positioned as one of the best pure plays in the space and was exhibiting momentary weakness.
As you know now, gold stocks and Royal Gold broke out in royal fashion! On that note and with the shiny yellow metal in a full bull sprint, I thought it timely to use neoclassical methods to map the current supply and demand zones, for it is the test of these zones that reveals information to the trader and a test appears imminent.
In the daily chart below (short term time frame) you can clearly see the anchored support zone that has formed on spot gold.
It is the intersection of all those large spikes in volume that correlates with wide ranging high/low bars. That intersection is the place that you have to expect buyers to come out in force if gold retreats. That is the demand side of the equation.
http://www.marketwatch.com/story/gold-passes-test-and-still-has-room-to-run-2012-09-12?link=mw_home_kiosk
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
| 