Loading ...Hi guys,
i´ve been looking at the charts to determine entry points for speculative mining stocks.
While generally the POG in USD and in EURos is above support (see earlier charts), and the POG could go up in a straight manner from here, something tells me maybe it is not yet the time.
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Generally I´d expect a next upward thrust for the POG to around 15xx USD (into horizontal resistance) and likewise to the old EURo high, i.e. to the channel top, thereby forming a double top – like formation. Or so.
I show these charts again, to get the picture:
The question is, what happens before any substantial upward move, to get things properly aligned? Something possibly is not yet right.
For one, look at the gradually declining volume of the royalties while making a new high (FNV). RGLD is a similar story in that respect.
So, while the high general price level in royaltiy companies tells me that the market does NOT expect substantially lower prices (=royalties) over a prolonged period, this ATH in FNV does not yet look sustainable.
And for the micros? You can buy many of them at favorable prices, compared to the whole bullmarket since 200x. But very often they are in decline, with convincing chart support still not really in sight. Like this one below for example, (while it is not REALLY far from its 2013-2015 lows. Some others look much scarier in that respect).
In other words, cheering the 2016 rallye in the micros was perhaps too early. I wonder if a necessary capitulation move for this 6-year correction is still missing, before we can get on board with high confindence, against all despair that will be in the air after many have been whipsawed.
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Now that low volume buying has driven some quality gold stocks quite high… and some small caps are gaining very well on good days like yesterday… sending signs of optimism, shortly after many were screaming like they wanted to commit suicide… I´d say: this new optimism must be driven out!
Like eeos stated: “they’ll fake everyone in the PM casino into thinking we’re headed into the basement”.
Looking at the POG shorter term (althoug yesterday´s candle is missing) makes me contemplate: What would do the trick, and still give us confidence?
As a conclusion of this chart, falling back to 1200 USD – back into the small triangle and right down to double support, could achieve that. Or maybe right down to the 2016 low @1050, and in extreme even a little lower, to scare even the most brave.
With any pullback of such kind in the POG, I will be looking for signs of capitulation in the PM mining stocks. Like pullback to strong support, maybe on high volume, in the royalties. And some more substantial pullback in the speculative micros – down to meaningful support which is an individual matter for each price chart.
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Not sure if the indicated trading volume in the last chart can be trusted and is meaningful. Maybe the trading volume in Futures is much more important?
Speaking of volume and assuming the histograms are correct and meaningful, I am aware of high volume in $gold through the last three weeks , accompanied by red weekly candles, while the price decline was not too large. So there are some factors as well, that could be interpreted in positive ways.
Buying stocks when they break overhead resistance in the right manner, might be the appropriate strategy in case of an immediate strong rise in the POG.
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Just my ideas. DYODD, as always.
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Please tell me what I´ve overlooked, or what your analysis is, based on charts if possible. Any comments will be appreciated. Always trying to learn, and committed to do better in the future, rather than buy-and-hold stocks finally going nowhere.