Central Fund of Canada (CEF) is a closed-end fund that holds gold and silver bullion. I have been bullish on Gold (see the DecisionPoint Alert) so it wasn't a complete surprise when this ETF landed in the middle of my last Price Momentum Oscillator (PMO) scan. The bullishness of the chart did surprise me.
Unlike Gold, CEF has been in a consolidation trading range since it topped out in February. Today, it finally broke out above overhead resistance. You could make a case for a bullish flag formation, but the size and length would calculate to an expected upside target $14.80 which doesn't seem realistic. However, the impending PMO crossover BUY signal and recent 5/20-EMA positive crossover do suggest some upside potential. The SCTR value is on the rise and volume is behind the move.
Conclusion: The positive breakout on CEF combined with a PMO BUY signal and rising SCTR are very bullish. I'd expect more upside, however, the bullish flag formation upside target of $14.80 does seem overly optimistic.
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Technical Analysis is a windsock, not a crystal ball.
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- Erin
