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Trade adjustment – Gold (GLD) addition

Today I added a few shares of GLD into my portfolio as Gold suffered a huge sell off. As I wrote in my previous post I believe the today’s price action is an overreaction of investors, most likely responding to (outdated) report from Sorros Fund Management.

As I wrote I believe GLD indicated a bearish exhaustion as is due for reversal. Let’s take a look at charts:

First take a look at 5 year chart, which nicely shows the new support line formed in October 2011.

Gold 5 yr chart

(Click to enlarge)

The red horizontal line indicates the support at which I originally placed a trigger buy order ($151.60 a share) and honestly I haven’t expected the price ever touch this level again.

Following is the 6 months daily chart:

Gold 6mo chart

(Click to enlarge)

In this chart you can see a very extended bearish candle and trippled volume. In my opinion this is a bearish exhaustion and we may experience a rebound. This price action also triggered my buy order today and I added shares to my portfolio.

02/20/2013 14:05:43 Bought 6 GLD @ 151.6

This trade lowers my cost basis in GLD from $164 a share to $160 a share.

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2 responses to “Trade adjustment – Gold (GLD) addition”

  1. admin says:

    Marvin, it is my goal with Gold as well to save enough cash and have at least 100 shares of GLD so I can sell puts and calls and have it secured by cash or stock. Not much comfortable selling naked.

  2. I believe the gold correction is an overreaction as well. I recently opened up a position selling a put of a gold mining company.

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