PS excuse typos, I am dashing for the door!
Hello all, a quick look at an example of buying gold stocks on the Weekly Chart.
If you think Gold is fundamentally in a long term trend but you want to capture ONLY the upside trend, here is a way to do it using the 30 Week Moving Average and Stage Analysis. IT is very simple and time proven. For more information on stage analysis, I would recommend reading Stan Weinstein or searching for his method. I have annotated the chart and pointed out Volume indicators and Price breakouts and breakdowns. This four stage pattern happens on all time frames, right down to the 1 minute time frame for day traders. But for those who want to buy and hold during a longer uptrend and get out at the down trend, this is a good start to TA.
Note that Volume doubled when AUY broke out, note RSI’s and Note that during Sage 3 distribution that volume was very high yet PRICE WENT SIDEWAYS! These are little clues that tell you that smart money is selling to dumb money.
NEVER EVER average on the way down, that is a sucker’s game. In fact, market makers and hedge funds depend on idiots buying during stage 3 and 4...do not do it unless you are looking to go short!
Also, check the overall health of the markets as Gold stocks will perform like every other stock!
I will cover that in the next chart...for now I am off for a walk on the Beach!