Where Is The Price Heading To?
Michael Tsen made a comment on my Gold Investment and Tetrahedron article Update 5 and showed us the chart above. He added the red lines and made the comments:"seems like could have bought at 825 and profit take at 875, could that be correct ?"
Well, I like the way you think, Michael.
To analyse whether the gold price is going up again, we have to draw the red lines differently. Also, while you may think at US$825 is a good point to buy, you also need to be able to know where the price may end up in.
It's similar to driving a car. You know where to start, and you also need to know where is your target destination.
Would it be a wise to buy at US$825 and sell at US$875? Do a quick calculation and see what's the profit. It's only about 6%. And if I invest with Public Bank Gold Investment Account, the spread is already 4.2%. That'll leave with only 1.8%. Would that be worthwhile to take a risk?
Anyway, back to the above analysis. I have seen the price going up on 16 January 2009. However, I didn't take a position because my other methods of analysis have not confirmed that it's a buying point.
I have also half expected it will go up when I compared it to the Elliot Waves. Indeed, the chart made an upturn going up. Now, I just need to have a few more confirmation on my other analysis before I call for a buy. This is one those times, when you are not certain, don't trade. Wait till the signs are clear.
Well, again, time will tell whether I am right or wrong.
As an ending note or foot note, the red lines above are not totally wrong. They are more suitable for another analysis called 'the triangle'.
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2 comments:
indeed, the triangle says trend sideway and should wait, else speculate within small range only.
Indeed, price is not moving much these last few days.
Let's wait and see what happens after Obama gives his first US Presidential speech.
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