Is That A Bull Flag?

On Feb 17th, after the recent run up in Gold, I mentioned that it could Pause and form a Bull Flag.  These are often just a pause along the way  (although they can fail).  So lets discuss the last few days and discuss Golds Bull Flag and other important implications that I am seeing.

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Feb 17 – I discussed a possible Bull Flag forming after a strong run higher. 

Feb 24,  We have the Flag and it is often  just a pause before continuing to run higher.

Then I started seeing similar bullish formations in various Miners, like TGD. This is an ascending wedge or ascending triangle, and usually plays out in a bullish break higher too. Hmmm.

Lets discuss chart patterns and look at some more Miners…

 —–  Yes, I know that I wasn’t going to have a report Friday,  but these patterns can be  helpful in hinting to us what Gold might do next week, and I wanted to share this even if no one wants to take a trade on Friday.  Also you need a fresh clean slate to write on in the comments section after yesterdays deep technical commentary filled that space . 

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TGD is an ascending wedge.  This is an ascending wedge pattern. Like a Bull Flag, You also buy a break out and place a stop below one of the lows.  I place mine a little below the apex.

This is how it often plays out,  long or short. The size of the opening of the wedge is the target at the break out.

This is the pattern seen in Gold currently. Gold is having a little trouble with the follow through, but this is the pattern so far.

So the idea is for a trader to buy that break out, but I often buy inside the flag with a stop a little below the 10sma, because the move can be rather quick once they break out.

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VGZ had one this week, and it acted correctly

Look at SSRI

CDE– If this plays out, we are watching CDE make HUGE GAINS.  Many miners are making huge gains.

AUMN has made some huge gains.  $0.12 to $0.68 in days,  that is crazy. Anything that goes straight up is in danger of falling back,  however, we do see a flag consolidation and it is no longer overbought as a result…

AUMN– And this is where it gets really crazy.  This could just double top inside of the current flag  (like on the left of the chart)  or this could get ridiculously overbought and run to $1 area..

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Do you remember when Miners would sell off deeper and deeper into impossible levels of pain? Some are now climbing higher and higher, leaving those waiting to buy that dip behind. Many people in public blogs are still bearish. I am NOT saying that these bull Flags cannot fail and lead to a pull back into a DCL,  but they can also just get ridiculously overdone to the upside first. I have recommended for those that are traders to trade the Miners,  for longer term investors?  We could get a pull back at any time, so cation is prudent.  When the game is over, we’ll step aside and reassess the situation. Until then, these Bullish patterns are consolidations allowing overbought to unwind a bit and then carry on upward.  We will likely see divergence as we climb higher, and then the pullback will begin.

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It is nearly impossible to say when this bull run will end, or even how it will end .  It could go sideways and just put a handle on all of these cups, or we could get a solid drop of 50% or so.  I will try to discuss that further in the weekend report, which will be out by Sunday night or Monday morning before the market opens. Have a great Friday & weekend!

~ALEX

P.S.  I like these set up too, mentioned in earlier reports.

EGI –  I mentioned this earlier this  week. It could break out immediately, or continue to consolidate.

LODE –  Posted on Feb 22 ,   we see another flag pattern.

SWC –  A beaten down Platinum stock,  it flagged under the 50sma and I bought it.  They had good earnings, so I am still holding for now.  It is currently above the 50sma