Gold Bullish Wedge Consolidation Pattern

by Olivier on November 23, 2010

Gold looks like it might need a bit more time to digest the recent move to the upside. I have redrawn the patterns I see developing. For now it looks like we are either in the process of building an ascending triangle or a bullish wedge. Gun to head I would say the wedge will prove to be the dominant pattern. In any case, holding the 1320 – 1325 price level would be constructive technical action. Let’s see what happens.

Gold Dominant Pattern Bullish Wedge Consolidation Technical Analysis Price Chart

Up-to-date Gold price chart on my public list.

A quick review of my portfolio positions:

  • PGD.TO – Peregrine Diamonds: Somewhat erratic trading personality. Not exactly what I would call smooth trading behaviour. That being said, the stock respected my stop loss level which in and of itself is validation of my original trade entry rationale. I tend to think recent price action is an attempt to shake out as many traders as possible prior to a huge move to the upside. A closing price in the 3.10 – 3.20 area will most likely set the stage for a surge to the upside. Let’s see if the stock can regain those levels.
  • UEX.TO – UEX Corp. and DNN / DML.TO – Denison Mines: Both look very bullish. Especially UEX.TO looks like it is about to break out to the upside very soon. Volume has dried up during the recent consolidation. This is extremely constructive technical action. Today URRE – Uranium Resources and URZ – Uranerz Energy led the way to the upside. They have broken out decisively. Odds are now very high for the rest of the Uranium stocks to follow suit. DNN has somehow lagged a bit, probably due to the recent private placement announcement. Although I am not exactly happy about the PP, I believe the dilution impact won’t be significant going forward.
  • TMB.TO – Tembec: Nobody is interested in Paper, Pulp or Forestry. The exact opposite of a crowded trade. Very bullish technical action and relentless buying pressure. A 4.50 – 5.00 $ price target for TMB.TO now looks feasible.
  • CNL.TO – Continental Gold: Excellent volume pattern and price behaviour. Smart money is starting to discover the story. Volume doesn’t lie.

Losses make the trader studious – not profits. Take advantage of every loss to improve your knowledge of market action. – Linda Bradford Raschke

My public list with all my charts can be viewed here:

Buenas noches!

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