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Gold Stocks Are Looking Very Bullish
Pinnacle Digest writes: Stewart Thomson explains the critical technical events that have occurred in the gold markets over the last seven days. Unlike much of the past three months, which saw critical support for gold around $1520 an ounce, Friday’s action established the $1625-$1645 range as a powerful support level.
Thomson explains that for the first time in a year, the gold bulls have beat out the bears and a previous key resistance point ($1625-$1645) has now become a key support level.
As strong as gold may look at these levels, Thomson believes that gold stocks are set to dramatically outperform the physical stuff. He believes that momentum-based trading funds are on the verge of jumping into gold stocks and will do just that if this uptrend continues.
When it comes to junior gold stocks, Thomson believes the upside potential could outperform many expectations. Using technical analyses to form his point, Thomson explains that when the GDXJ (junior gold miners ETF) breaks through 22.58 (which it is extremely close to right now), it could lead to “a major bull move higher”. “I'd like to see investors focused on the higher profit booking zones at $27.16 and $29.65” said Thomson about the GDXJ.
In respect to the silver market, Thomson is extremely bullish for the precious metal and states “Silver is more likely to experience numerous intra-day sell-offs than a major leg down in price. I would sell very little silver here ("sell like a bird").”
According to Thomson’s technical analyses, silver is flashing multiple buy signals and any corrections will likely last for a day at best. While some argue that silver is greatly overbought at this price, Thomson believes that silver is in fact oversold.
Click here to read Stewart Thomson’s article with detailed technical analyses and gold market insight.