March 6, 2013 (by Frank Kollar)
Shares of SPDR Gold Shares (NYSE: GLD) have declined precipitously since the August-September 2012 rally that fell apart just short of $175 a share.
GLD is a widely traded ETF that follows the price of gold bullion. Shares are extremely volatile but if you get the trend right, they can also be extremely profitable.
The summer rally was, we thought, going to be short lived. It was. GLD turned right at predicted resistance and plummeted. It has not stopped dropping since.
Chart Courtesy of
StockCharts.com
There is a bottom for every decline just as there is a top for every rally. The trick is to be with the trend whichever way it is headed, and not try to guess the reversal point.
But for the sake of those who like trying to do so, we will peg the bottom of this decline around the $145.00 level.
With share prices holding just above the $150 level which acted as support back in June, 2012, we are looking for one more break lower, and then a quick selloff to the $145 level.
If we get a bullish reversal pattern near the $150.00 level, it may also signal a bottom. This of course is where the risk comes in.
After reversing to the upside, it remains to be seen how much of a rally can be mounted by bullish traders.
The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy does not have a position in the SPDR Gold Shares.
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