The Fall of Gold and Their Related Sector

Following up on a previous article written about GLD, this article looks at the mining industry that obviously would be directly impacted by the fall in recent capitulation in gold and precious metals.

By now, every investor or trader should have already read or heard about the fall of gold in the commodities market last week. If you haven’t, here’s a recap — let’s look at the charts of the  popular gold ETF, GLD

GLD monthly

Since the peak of August 2011, GLD has dropped about 22%. In fact, the ETF broke its long term uptrend support beginning of 2012 and has been trading sideways since then. Last week’s capitulation was significant when GLD broke the $150 which served as support during the consolidation period. Now that GLD has broken that psychological support, the next question is, how low can it go?

A clue would be the the popular Fibonacci 61.8% retracement level, which is a popular technical analysis tool used by traders. If we measured the Fib from its base of around $45, GLD should find some support around $132 level, which is near a the round number $130 — another psychological support if you like. Like most things in the markets, nothing goes down (or up) in a straight line, so there we could see a short bear market rally at those “round number” levels — the next one being $140 (not shown above).

Often, the price movement in a major commodity like gold will have an effect on stocks of companies involved in the mining or related industry. An ETF that tracks gold miners is the GDX

To find out more about the performance of this gold mining ETF, click here to read the rest of the article.

STI-30 Watchlist – Mon 28 May 2012

Apologies for the lack of updates in the past couple of weeks. Since the last Watchlist update on 6 May, the STI has followed trended downwards in tandem global markets. Let’s take a snapshot view of the state of the STI-30 stocks (taken intraday 1230hrs on 28 May 2012, so closing prices may be different):

 

 

Not a pretty sight if you’re currently holding long positions. None of the STI30 are giving any buy signals on Weekly EMA 2/5, although GLP is starting to show some signs of coming back to life. The other worrying trend here is that almost all of the STI30 are below their 200-day MA, which suggests that the STI market is firmly in bear territory.

The ADX readings are all on the high side (above 30), which suggests that bearish momentum is strong, with stocks like Wilmar and Golden Agri reaching as high as 40+. Has the market bottomed?

The first clue to look for is the ADX reading to reach a peak and reverse course to drop back towards 30, which signals a weakening of the bearish momentum. Once the ADX drops below 30, look out for reversal of momentum to the upside by monitoring for the weekly EMA 2/5 cross to be supported by an increase in ADX reading back above 30.

Click here for the perma-link to the STI30 stocks analysis table. 

Can you find any stocks out there due for reversal?

 

 

STI-30 Watchlist – New Updates on 6 May 2012

How many times have you wished that you knew when to start loading up (or shorting) stocks listed in the SGX? We have treat for all investors and traders who are looking to learn about using technical indicators (EMA, ADX, MACD) to time your entries (and exits).

We have prepared a special section called the STI-30 Watchlist, which is a table of 30 stocks listed in the Singapore Straits Times Index (STI). The list is updated weekly to give you signals that can help you in planning your trades. The page also provides links to weekly and daily candle charts, as well as delayed quotes from the STI-30 stocks.

What are you waiting for?

Click on this link to jump to the page, or click on “STI-30 Wathclist” on the menu bar from the home page