Wednesday, January 11, 2012
Gold Back In Play
In mid-December gold broke below its 200 day moving average for the first time in almost 3 years, causing traders to liquidate long positions and analysts to declare the bull market in gold over.
However, selling the break of an UPWARD sloping moving average can be a dangerous play, especially on the first attempt. A look at the longer term chart shows that the trend is clearly still up.
Being long gold via the GLD ETF is a great risk/reward play here with a stop back under the 200 day moving average on a closing basis. The 200 day ma should come in around 158.75 tomorrow. However it would take a break below the long term channel support of 148.50 to be able to truly call the bull run over.
I went long today at 159.14.
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