Golden-Cross in GLD looks probable - Short-term trade idea
A Golden-Cross is a bullish event. The SPDR GOLD TRUST (GLD) looks to be setting up for one in the next several days. I have marked up the last 2 times this has occurred with this instrument, with some data to keep in mind.
As I have noted on the daily chart, it is important to understand that a Golden-Cross requires some serious momentum to push the 50-day simple moving average up through the 200-day simple moving average. This causes the instrument to (usually) become over-bought before the event actually happens. I like to use the Relative Strength Index (14) to measure this. As you can see the RSI has already hit 75.65 on Jan 3rd and has pulled back to 63.43 as of today (Jan 15th). It is therefor crucial to be prudent in selecting your entry / add price(s) in order to maximize any profits.
There is no guarantee that a golden-cross will cause a stock price to go up nor is there any way to determine how long any benefits will remain. Past occurrences are a great tool to use in my opinion, and as so, are the reason I have included them on the chart.
As I have noted on the daily chart, it is important to understand that a Golden-Cross requires some serious momentum to push the 50-day simple moving average up through the 200-day simple moving average. This causes the instrument to (usually) become over-bought before the event actually happens. I like to use the Relative Strength Index (14) to measure this. As you can see the RSI has already hit 75.65 on Jan 3rd and has pulled back to 63.43 as of today (Jan 15th). It is therefor crucial to be prudent in selecting your entry / add price(s) in order to maximize any profits.
There is no guarantee that a golden-cross will cause a stock price to go up nor is there any way to determine how long any benefits will remain. Past occurrences are a great tool to use in my opinion, and as so, are the reason I have included them on the chart.
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