Monday, December 22, 2008
Royal Gold breakout
A confirmed stock price break out has occurred with Royal Gold (RGLD), one of the gold stocks I hold and have been watching closely. This is bullish not only for this stock, but for the gold mining sector as a whole. A breakout above a previous congestion zone/resistance price levels on a chart clears the way for a stock to go higher. You want to see good volume on the breakout and you want the stock to close at least two or three days above the breakout to confirm it.
First, a longer term 5 year chart:
Next, a shorter-term 3 month chart:
Though RGLD could potentially move higher over the next week or so, it is due for a correction, which will help "test" the breakout levels at the 38-40 range. If the stock holds those levels on the next correction into early 2009, then a bull's paradise awaits those bold enough to hold. Look to buy at this point if you want to take the plunge. The last big bull move in this stock from mid-2001 to mid-2003 yielded over 800% in 2 years.