Gold is Breaking Out…in Oil Terms
- Posted by Greg Harmon
- on October 9th, 2012
The ratio of Gold ($GC_F, $GLD) to West Texas Intermediate Crude Oil ($CL_F, $USO) has been in a symmetrical triangle pattern for the last 18 months after a 2 year stint in a consolidating channel. Now, breaking above the triangle, it has a target of 29.80 from the pattern. There is support from the rising and bullish Relative Strength Index (RSI) and a positive Moving Average
Convergence Divergence indicator (MACD) for more upside. Also notice that the Bollinger bands are opening higher. This can play out by Gold moving higher, or higher faster than Oil, and or Oil moving lower or lower faster than Gold. But with Gold looking strong and Oil weak you may already have an idea of which way it may play out.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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