JSE GOLD IN­DEX

Finweek English Edition - - Creating wealth -

Trend: Side­ways to down. Strat­egy: Avoid gold shares un­til the price even­tu­ally breaks above line 2. • The JSE gold in­dex con­tin­ues to lag most other sec­tors on the JSE by a large mar­gin. The in­dex is in a fall­ing wedge be­tween lines 1 and 3. Line 2 is im­por­tant re­sis­tance, cur­rently at the 2 930 level. As long as the price re­mains be­low line 2, the gen­eral trend here is still neg­a­tive. • The daily Sto­chas­tic Os­cil­la­tor (on top) is mov­ing down from the over­bought level in the short term, point­ing to more fall­ing to come in gold shares. There­fore, one should be avoid­ing gold shares un­til such time as the price closes above line 2 (2 930). Ag­gres­sive traders, how­ever, can buy gold shares only if the price re­verses up off line 1 (2 650). But this is risky and bet­ter op­por­tu­ni­ties are avail­able else­where on the mar­ket. • The bot­tom win­dow com­pares gold shares with plat­inum shares on the JSE, and the fall­ing line shows gold shares con­tin­u­ing to un­der­per­form plat­inum shares.

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