Breakout in GLD? A Look at the Arc and Triangle

Jun 18, 2010: 2:02 PM CST

Has GLD Broken out of its triangle resistance boundary?  Let’s take a closer look.

GLD Daily:

I’ve been posting for quite some time regarding the “Arc Trendlines” in Gold and GLD, as seen above with the small green ‘arc’ lines.

Those lines remain the dominant chart trendline pattern (trendlines do NOT always have to be straight lines) to watch.

Because the arc up is accelerating, we pay more attention now to the lower trendline and are on constant watch for any break through (sideways counts) this rising lower arc line.  Until that happens, the lower arc has and will continue to remain a key support line to watch.

Other lines to watch include the 20 and 50 day EMAs at $120 and $118 respectively for potential support.

The dominant (very) short-term pattern appears to be the symmetrical triangle as drawn with blue trendlines at the $122.00 overhead resistance level and $120.00, ascending from the connected lows as shown.

The official break above $122 is occurring today on lower relative volume (than the last few weeks) – and as of this posting – price has formed a weak doji above the key breakout level.

That means we should watch this very closely to make sure this isn’t a bull trap, similar to what could be forming in the S&P 500.

I’ll keep you posted on this development, but for deeper, more in-depth analysis, become a member of our Weekly Inter-market Report service, where I look at the 5-major markets (including gold) on three timeframes and highlight opportunities and key levels to watch in each report.

Corey Rosenbloom, CMT
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