Gold is making big waves amid long-term uptrend | chart of art
Gold may not be the most exciting asset right now, but it is on a long-term upward trend and is probably the strongest commodity. There are also signs that the January downtrend is coming to an end, with RSI reaching momentum support and a bullish continuation pattern forming. GLD was first highlighted in a Chart Trader report/video on Tuesday, January 30th.
The first chart shows Gold SPDR (GLD), which has been trading around $150 since October 2022. GLD advanced to region 190 by May 2023 and was then revised to early October. This is called a correction because a large downward channel (blue line) has formed and the decline has retraced 50-61.8% of the previous advance. GLD broke out of the channel in mid-October and hit new highs in late December.
The indicator window shows the trend composite turning bullish on October 26th (green arrow), about a week after the channel breakout. This indicator aggregates signals from five trend-following indicators. It started at +1, moved to +3, and is now +5. This means that all five inputs are in Bull mode. Trend Composite and 10 other indicators are part of the TIP Indicator Edge Plugin for StockCharts ACP (here).
The following chart shows GLD correcting after reaching new highs. GLD hit a high in late December and then fell again in January. This decline formed a downward channel and reversed about two-thirds of the December gains. GLD has been making waves with bounces and breakouts over the past two days. The green line at 186 indicates support for a revaluation.
The indicator window shows RSI(14) exceeding 70 in October, late November and early December. This shows strong upward momentum in the fourth quarter. RSI fell back to the 40-50 area in mid-November, mid-December, and mid-January (shades of green). This area acts as momentum support in an uptrend. There are signs that RSI is rising in this area and improved momentum supports a channel breakout.
TrendInvestorPro’s Chart Trader product provides extensive market analysis and carefully curated trade setups for stocks and ETFs. We focus on bullish continuation patterns such as GLD. Reports are released every Tuesday and Thursday before the market opens, and each report includes a video. Click here for more information.
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CMT Arthur Hill is the Chief Technology Strategist at TrendInvestorPro.com. Focusing primarily on U.S. stocks and ETFs, his systematic approach to identifying trends, finding signals within trends, and establishing key price levels has made him a respected market technician. Arthur has written articles for numerous financial publications, including: Barons and Stocks and Commodities Magazine. In addition to his Chartered Market Technician (CMT) qualification, he holds an MBA from Cass Business School, City University of London. Learn more
