It is still too early to tell if the recent price spike in gold will end up being a lower high. If this scenario unfolds I would expect an ABC correction. That would give us a price target of 1,000 US$. That level is extremely strong support. For psychological reasons round numbers are very important. Furthermore the 1,000 level has been an important resistance level in the past. It would be a classic case of former resistance turning into support. One of the most important technical analysis concepts.
We are not there yet. Gold could easily move up during the next few sessions, take out the recent high and invalidate that scenario. We will find out soon which gold price scenario will unfold.
Up-to-date Gold chart on my public list.
At the beginning of the year I outlined my thoughts and what I expect for 2010. MRZ.V – Mirasol Resources started the new year with a stellar performance but is somewhat struggling right now. As of yet this looks like they are shaking the tree and if the stock can trade back above 2.00 soon weak hands will have sold. Let’s see what happens.
Right now I am basically testing the markets with my positions in MRZ.V – Mirasol Resources and MXI.V – Merrex Gold. I still do not want to be overly aggressive at this point in time. The way both trades pan out will either prompt me to stay defensive and patient or to open new positions and be more aggressive.
It’s OK to be wrong; it’s unforgiving to stay wrong.
– Martin Zweig –
Have a great evening!