Sunday, March 15, 2009

Gold Investment : supplement info 090314

It is exciting to read about Carson Ding's take on gold investment, basically he is forseeing immediate up swing soon.

Since this blog's duty is to cool people's head when overheating and heat people up during down mood, so this is a post to supplement Carson Ding's article.

First of all, technical analysis should NOT be the ONLY reason one decide to buy or sell.  Doing so is as good as gambling actually despite what other gurus have told you.

However, in this case, one of the macro principals is that we should buy gold during war time.  So keeping gold during recession is fundamentally the right move.  With that in mind, technical analysis would be able to help in better timing.

This blog also mentioned before that Technical Analysis can be very misleading and could give you different indicators when your X axis changes.  Lets review this claim here.

Below is a chart of 30 day gold.  As you can see, its actually on a down trend.  But recent price move break out of the trend show good sign.  However, up trend has not been formed and it may face resistence at 940.


60 day chart basically tells the same thing as 30 days with slightly bullish longer term trend.  However, it may also seems like forming a head and shoulder pattern which implies potential deep bearish.  However, this head and shoulder pattern is weak and subsequent movement can rule it out by now.  In addition to 940, this chart also shows resistence at 930 and 950.


6 months chart shows very strong up trend and now is one of the best buying time.  Actually just briefly pass the best buying time.


1 year chart reaffirm 6 month analysis with 920 as floor price and 970 as ceiling price.


5 years chart shows weak side trend between 720 to 1000.


10 years chart shows up trend with 1000 as ceiling price.


So summing all up should evident that there is NO CLEAR indication to buy or to sell because it is most likely to trade side ways, with short term down trend pressure and long term up swing potential.  Therefore, overeall tendency is on the buy side especially if you can keep another 2-6 months. ( read this article how to earn money in side trends )

As for those who have bought and wonder when to sell.  Well, there is really no clear sell signal as there are too many resistence lines identified in different period of charts, all the way from 920, 930 ... to 1,000.  Therefore clear selling trend has NOT be formed yet.

Furthermore if you think the economy is going to get worse on the months to come, then both principally or technical analsysis wise, you should buy and hold, revist the trend 2-6 months later to see if selling target has shown up yet.

1 comment:

CK said...

Yes, I agree with you that it is possible a side trend. From my pov, if it doesn't go up tremendously next week and break the resistance line, it might be a side trend.