Quick Take: Gold Flashes Technical Upside

Gold is posting its strongest week of 2013 and has a some more technical upside, TradeStation's Stanley Dash tells <I>TheStreet's</I> Joe Deaux.
By Bret Kenwell ,

NEW YORK (TheStreet) -- While the bulls and bears continue to duke it in the gold pits, Stanley Dash, vice president of Applied Technical Analysis at TradeStation, tells TheStreet's Joe Deaux that there's still some upside left in the near future.

Although 2013 has been a relatively bad year for the yellow metal, it has had a nice bounce this week. However, investors are getting nervous the metal will now start to head lower. Contrary to his name, not so fast, says Dash.

When looking at the long-term charts, he pointed out that gold was still in oversold territory. By holding that $1,260 level, the first line of support is still intact. Upside resistance is strong though and has made itself apparent. The $1,300 to $1,325 area quickly shunned gold when it climbed to $1,297 before prices quickly retreating lower.

He added that the resistance isn't just a ballpark figure but is in that entire $25 range. So while gold might make it over the $1,300 mark, it doesn't mean that it will be there for long.

Downside support exists at $1,260, $1,207 and finally $1,179 -- which is also the most recent low. Below that, Dash says $1,154 comes into play.

While the metal is still in a major downtrend and can certainly find its way down to those new lows, there is likely more upside left first, based on the current oversold state.

"There's a reasonable probability we get a little more upside," he concluded. "For traders, I'd probably be looking to trade the long side."

-- Written by Bret Kenwell in Petoskey, Mich.

Follow @BretKenwell

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

Loading ...