RGLD – Royal Gold Breaking Out Without Volume Surge

by Olivier on November 18, 2009

Tonight’s posting is about RGLD – Royal Gold, a stock I’ve been tracking for quite a while. I’ve written about RGLD in the past as the Gold Royalty Concept is a low risk approach I do like. Right now the stock is breaking out to new all time highs. Price wise there is nothing not to like about the recent break out move. Volume wise it’s a different story.

As a technical trader there is no way I will argue with price. But in order to initiate positions with confidence I need the volume pattern to confirm a price move. This is not the case with RGLD’s recent move. There is no above average volume accompanying the price surge. This is cause for concern and a potential warning sign. A red flag.

RGLD - Royal Gold

Up-to-date RGLD – Royal Gold Chart on my public list.

GDX – Market Vectors Gold Miners ETF and GG – Goldcorp are two stocks representing big cap gold miners. Both show unconvincing volume patterns and GG’s price movement is not exactly thrilling. On the other hand check some of the GDXJ components for junior gold miners with great looking price charts.

GG - Goldcorp

Up-to-date GG – Goldcorp Chart on my public list.

I am being very cautious and staying on the sidelines. There will be plenty of opportunities going forward. I prefer waiting for great setups I am comfortable trading. No need to rush things.

Have a great evening!

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