Gold started the year off with high expectations following a tumultuous 2015 that saw the market come under attack from theme's such as the Chinese economic slowdown and the Fed's decision to alter the course of interest rates in the US to an upward trajectory.
Needless to say the past few months haven't boded well for it's yearly performance and this stock is a good example of how gold miners have been adversely affected by the sudden weakness in the yellow metal.
There was an amazing run up to the highs registered in June of this year against the backdrop of a staggering underperformance by this commodity for a number of years. The subsequent consolidation that happened between June and October produced a topping pattern in the form of a Head & Shoulders with the breakdown occurring at the beginning of October.
Price had initially broken to the downside with a solid red candle but crept it's way above the neckline of the formation that made optimists hopefully of a resurgence however that has been short-lived ever since the price has reversed back down and begun it's descent once again.
Those trapped in long positions might find themselves compromised should the price be able to get lower than November lows with a heavy selloff expected.
The 50 day moving average has a negative gradient that's shaped itself out over the last few weeks which gives impetus to the sellers finding ways in tearing apart a good performance for the year.
No comments :
Post a Comment