JSE GOLD INDEX
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.