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People have laughed for so long at gold that it shouldn't surprise anyone that they're still doing it now. In years past, the laughter was justified because the metal and the stocks were in big downtrends, while other items were working fabulously.

But the laughter is increasingly becoming a contrarian indicator because the stocks and the metal continue to improve slowly. Combine slow improvement with stocks and a commodity above upward-sloping moving averages. Add to that bearish-to-uninvolved investor sentiment, and pretty soon you have a recipe for nice upside action.

In a recent column titled

Singing Along With Greenspan, I wrote the following:

I think gold and gold stocks are going to rally. This idea seems to fit with the rate rising on the 30-year bond. The spot gold price is above its upward sloping 200-day moving average ($275.35 vs. $272.32), and though the stocks haven't worked in the last month (!), I still feel the group will work higher. Freeport-McMoRan Copper and Gold (FCX) - Get Report looks as if it is making a major low. The stock is above its 50-day and 200-day moving average and is, in my opinion, in a sweet and still largely avoided sector. I think this stock works -- but it will take time. Use pullbacks to the $11 area to add. Best stop is $9.95.

Freeport closed Friday at $12.50, so today I thought it'd be a good idea to go into this concept in more detail. Here goes:

Source: Arnhold and S. Bleichroeder

Source: Arnhold and S. Bleichroeder

Granted, gold and gold stocks come with a ton of baggage, so it's easy to understand why nary a bullish comment is spoken about them. As peculiar as it may sound, I almost think that saying something bullish about gold and gold stocks is akin to attending a meeting of the He-Man Woman Haters Club, made famous by Spanky and Alfalfa from

The Little Rascals

. (Please hold the nasty emails -- I'm kidding.)

Aside from Freeport-McMoRan Copper and Gold, another gold stock that might work higher is

Ashanti Goldfields


. The stock has been consolidating since July while remaining above its upward-sloping 200-day moving average.

The downside is that the stock is priced low, closing Friday at $3.63, and volume isn't great. All in all, though, the pattern is too good to ignore. I expect the stock will be able to work to the $7 level. The best stop is $2.98. Please take a look at a weekly pattern for some nice long-term perspective.

John Roque is the technical analyst at Arnhold & S. Bleichroeder, a New York-based investment brokerage firm specializing in Europe and the U.S., and a frequent guest on CNBC. At time of publication, Roque had no position in any of the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. He appreciates your feedback and invites you to send it to

John Roque.