Technicals | Mar 28 2011
By Rudi Filapek-Vandyck
The TechWizard reports he's convinced the price of gold has reached a turning point as the price surged to a new all-time high, but the move was not confirmed on the MACD indicator. In technical lingo, such an event is called a "bearish divergence", points out the Wizard.
This is where things get interesting… The Wizard has looked it up and the last two times when such a bearish divergence happened the price of gold experienced at least a US$70 sell-off after the event.
The Wizard suspects this time will follow the same script and thus we should see some stop losses getting taken out soon, he says.
His personal target is for gold to fall to US$1350-1300/oz.
The TechWizard is the pseudonym of Scott Morrison, whose experience in financial markets exceeds twenty years. Morrison operates his own website nowadays at www.techwizard.com.au. All views expressed are the TechWizard's, not FNArena's (see our disclaimer).
Technical limitations
If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.