I pointed out a bullish Reverse Head and Shoulders possibly forming last week on Gold. It's still in play in my opinion, but the longer-term horizontal trading range, being a pattern that has been around longer, holds a bit more weight on what gold's next move will be.
Below is a chart with the reverse head and shoulders pattern annotated, as well as the top of the horizontal trading range that will pose strong resistance even if price can break through the neckline of the reverse head and shoulders pattern. Good news is that the PMO has shifted, indicating that gold has some positive momentum built up. It is heading for a clean positive crossover which would be very bullish. Also notice the 20-EMA narrowly avoided a negative crossover the 50-EMA. That crossover would have put Gold on a DP Trend Model intermediate-term SELL signal.
The weekly chart (which goes final on Friday) looks good. First we note that the 17-EMA has turned back up toward the 43-EMA. The PMO which looked like it might top has turned back around expressing positive momentum in the intermediate-term. I also note a positive divergence between the PMO and price.
My main concern with gold right now is the long-term chart has some issues. The DecisionPoint analysis approach tells us that the longer-term influences the intermediate-term, which in turn influences short-term. The issues I see are a bearish reverse flag formation and a falling PMO.
For a "complete" picture of Gold and others like USO, Oil, Dollar, UUP, download the DecisionPoint Trend and Condition ChartPack. We JUST released it this week. Remember, if you don't like the contents of the ChartPack, you can tailor it or just uninstall it.
Happy Charting!
Erin
