SPDR Gold Shares (NYSE: GLD) — This ETF had a terrific run from $80 a year ago to the recent top at over $138. My hunch is that gold will break into new high ground sometime within the next 12 months. But much technical damage has been done recently and a consolidation is in order. 

GLD’s 200-day moving average is around $125, and it is at that price that I’ll consider new positions. As with all stocks and ETFs, it is better to let them come to you rather than to chase higher and higher prices.

But yesterday’s reversal could produce a buying opportunity for traders of call options and could also give current holders a good exit point for those who wish to take a profit. That bounce from the neckline of the chart could easily run the stock to the top of the open gap at $133.40, and perhaps even to the 20-day moving average at over $134.

But please bear in mind that if you go after this short-term trade you are trading against the overall trend. Enter stop-loss orders to protect against a further collapse in the metal.

If you have questions or comments for Sam Collins, please e-mail him at samailc@cox.net.