Today’s chart is of SPDR Gold Shares (GLD) which seeks to replicate the performance, net of expenses, of the price of gold bullion. The trust holds gold, and is expected to issue baskets in exchange for deposits of gold, and to distribute gold in connection with redemption of baskets.
Chart of the Day: SPDR Gold Shares (GLD)
What I Am Looking At:
- Year-over-Year return +1.8 percent, possible support from the 0 percent level
- Short-term trend is currently down as depicted from the blue channel in the chart above
- Longer-term consolidation zone between $150 and $175 (not shown)
- May-October 2012 up-move completed a Fibonacci retracement of 61.8 percent
- Coinciding support from the June-July highs
- Volume-by-Price indicating support area between $159-161
- Short interest has increased 27 percent since October peak
- 5 percent of the float is sold short
- Peak put open interest for the January series resides at the 160-strike which could be supportive
- The current 10-day buy-to-open put/call ratio ranks in the 90th percentile of all readings taken during the past year, which suggests a healthy amount of pessimism among option players
- 30-day implied volatility is low, ranking in the 10th percentile
Strategy: Long trade could be established at current level with a stop below June-July high near $157. If this level breaks look for GLD to eventually fall to the May 2012 lows.