|longdong. Some very good TA in there. For those just logging|
on, here's the author's conclusion based on the numerous charts and indicators cited in his analysis:
All the indicators have formed patterns that three out of five times turn out to have a bullish resolution. In fact the very same patterns were observed last year between late July and early August as the HUI, and the XAU embarked on a 20% rally. In addition, the price action of both the HUI and the XAU is defined by rising channels and predictable oscillation between channel support, and channel resistance. The advance has been confirmed by the Summation Indexes, the A/D line, and the Cumulative Volume. All in all, up-to-now, it is quite difficult to find rational reasons to be bearish about. Could this "perfect picture" possibly turn out to be a fake-out and a bull-trap? Yes it is possible, anything can happen in the markets, however, it is not very probable. As long as the XAU, and the HUI are making higher lows, and higher highs, we ought to be bullish and continue to add t our positions during pullbacks near support.
Given the price action of late, the odds are better than even that gold will pullback to $440, the XAU will pull back to 97-96, and the HUI will pullback to 212-210. There is a chance that the XAU may pull back to channel support at 94, but ideally that shouldn't happen. If it is embarking on a multi-week rally, it should be moving away from channel support, and staying towards the mid-point, which is in the 97-96 zone.
If the XAU pulls back to the 97-96 level and then it reverses back to the upside, we would expect it to rally up to 102.5-103.5, before it pauses again. We would use any pullback to the 97-96 zone and a subsequent reversal to the upside as an opportunity to add to our long positions>
Disclaimer: Nice to see a strongly evidenced presentation that comes to the same conclusion as my own work which, though overlapping in a few areas, draws on largely different FA and TA data streams.