Wednesday, May 13, 2009

Royal Gold - This is it

I have been patient and methodical with Royal Gold (ticker: RGLD) and have previously covered this stock's long-term breakout and implications here, here and here. So now that I am heavily invested via 2010 bullish LEAP call options, I want to focus on where I think this stock is headed based on the technicals, as the fundamentals for this stock and all Gold stocks are wildly bullish given the severe nature of the current deflationary forces.

To the weekly 18 month RGLD chart:

Here is my "guestimate" of Gold price action over the next few months:

After an anticipated slight nominal new high in the Gold price, I'm thinking a rest through the rest of the summer to set us up for the parabolic stage in the Gold bull market this fall.

Also, some have been asking about my lack of bullishness on other Gold stocks. I am not of the opinion that Gold stocks won't all go higher, I just think the senior blue chip Gold stocks have already made the bulk of their move for this run and would recommend using stop losses to protect profits for traders. Smaller cap stocks like RGLD are the ones making explosive moves right now, but senior Golds are certainly having a nice short-term run as well. For long-term investors in Gold and Gold miners, sleep well my friends!

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