February 4, 2011
Shares of Streettracks Gold (NYSE: GLD) moved solidly higher on Thursday, February 3 after early day weakness. But can GLD continue higher?
Over the past month share prices have declined about 9%. A normal decline for stock indexes but a very moderate correction for this volatile ETF.
Thursday’s rally erased two weeks losses and could be the start of a new advance. We do have a concern. Typically corrections complete only after at least a three wave decline. Though we could have a three wave decline, it looks more like this was the end of only a wave A, or the first wave down.
If this is the case there will be more selling after this burst of buying ends.
Bullish traders could place a stop below the correction lows, at about $127.75, to protect against this scenario. Resistance is at $135.50 and support is at $127.75.
Fibtimer.com does not currently have a position in Streettracks Gold.