Nice article by Clive Maund which includes TA as of November 4, 2006. Obviously both gold and silver have risen even more since then.
THIS IS IT - to your stations...
originally published November 4th, 2006
One of the dangers of continually being close to the market, is that you can get lost in day to day detail, or even hour to hour detail, and end up not being able to “see the wood for the trees”. A way to counter this tendency is to use weekly or monthly charts, which filter out daily “noise”, and thus highlight changes to the big picture. As we will shortly see, weekly charts reveal that last week was a big one for gold and silver.
On daily charts it is not immediately clear that gold and silver both broke out last week from their lengthy triangular consolidation patterns, and this is especially the case with silver, although the application of trendlines does reveal that this occurred. On the weekly charts, however, it is obvious, even without trendlines.
The 3-year weekly chart for gold provides excellent perspective as it covers a substantial timeframe and strips out the noise of daily fluctuations. On this chart it is clear that gold staged a significant and sizeable breakout last week. It is also readily apparent on this chart that the triangular consolidation from the overbought peak in May was a perfectly normal reaction/consolidation back to the 50-day moving average that caused no technical damage, and, on the contrary has created the conditions for a sizeable advance by completely unwinding the overbought condition that existed back last May, as revealed by the neutralization of the MACD indicator at the bottom of the chart. Our minimum target for a new intermediate uptrend in gold is about $750 - $770. One gold dealer reported “minimal interest” in gold a few days back. Great - that’s exactly what we want to hear - you certainly don’t want to be buying something when every Tom, Dick and Harry wants in.
The situation for silver is much the same as that for gold, except that, as we can see on the silver chart, silver looks even stronger due to its triangular consolidation pattern being more upwardly skewed. Silver also has the added advantage that its breakout is so far marginal, compared to gold’s breakout - so there is everything to go for with silver.