To 321gold home page

Home   Links   Editorials

CHARTWORKS - OCT 4, 2006
Gold Update

Technical observations of RossClark@shaw.ca

Bob Hoye
Institutional Advisors
Oct 6
, 2006

Gold's rally to $607 last week satisfied the minimum interim upside targeted resistance of $600-$610, but came well short of the $626 that would be needed to confirm a major breakout. The subsequent break of support now requires an update in the analysis.

Over the years, gold has shown a tendency to make 50% to 60% retracements within rising and declining trends. In the early stages of a trend these retracements tend to overlap the previous trading range, but fail to penetrate the midpoint of the prior consolidation. The rally into September 28th retraced 53% of the decline from the September 5th high of $640 and marginally overlapped the July 24th low of $602.

Now that prices have violated the September support we can lower the important upside resistance level from $626 to $588. A close above there would be viewed as a catalyst for a renewed bull market move. In the interim, resistance should be encountered on 50% to 60% retracement rallies of the break from $607.

Examples of resistance

Here is what happens once prices move up through the midpoint of the' last failed rally'

-Bob Hoye
Institutional Advisors
email:
bobhoye@institutionaladvisors.com
website: www.institutionaladvisors.com

CHARTWORKS - OCT 4, 2006

Hoye Archives

The opinions in this report are solely those of the author. The information herein was obtained from various sources; however we do not guarantee its accuracy or completeness. This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized.

Investors should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Neither the information nor any opinion expressed constitutes an offer to buy or sell any securities or options or futures contracts. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report. In addition, investors in securities such as ADRs, whose values are influenced by the currency of the underlying security, effectively assume currency risk. Moreover, from time to time, members of the Institutional Advisors team may be long or short positions discussed in our publications.

321gold Inc