Gold share break­out is a strong pos­si­bil­ity

The Star Early Edition - - COMPANIES/ANALYSIS - Colin Abrams

GOLD shares, as seen by the JSE gold in­dex, have been in the dol­drums in re­cent months. How­ever, there is now the po­ten­tial for an up­side break­out in this in­dex, as shown on its chart.

JSE GOLD IN­DEX – Break­out po­ten­tial.

Rec­om­men­da­tion: Buy a break­out.

Trend: Down since April, but side­ways this year.

De­spite fall­ing in re­cent months, the JSE gold in­dex looks to be sta­bil­is­ing right now af­ter find­ing sup­port at its March low.

A break­out and close above its red line (re­sis­tance) at 1 300 will be a buy sig­nal for gold shares.

The min­i­mum tar­get then will be 1 395, with fur­ther po­ten­tial to 1 480. Gold Fields is the strongest of the gold shares at the mo­ment, and is the pre­ferred pick.

But pro­tect your trade by sell­ing if this in­dex closes be­low its re­cent low (1 165).

Colin Abram an In­de­pen­dent tech­ni­cal an­a­lyst. To sub­scribe to more rec­om­men­da­tions by the au­thor, or at­tend his cour­ses, please go to www. the­mar­ket.co.za

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