Sunday, April 25, 2010

At important levels - GLD, USO, UUP

The commodities made a big move up on Friday and I figured it would be useful to see where they stand and what one could expect in the near future. I am glad I had a look because it turns out both gold and oil are at important levels. Let's start with gold first.

GLD - Nice bounce on Friday. 114 is the level to keep an eye on. If it breaks that with volume, there is no resistance till the previous highs made in December - 119.54. Would like to see more volume enter though, and soon.

USO - Bounced off the MA(50) on Friday.....again, having done it thrice now in the last three months. The highs from January - 41.19 are the next resistance level followed by 42. A break of 42 and we could be off to the races. Only disappointing thing in this again is the volume, or rather the lack of it. Volume was disappointing on both Thursday and Friday and for this move to gain conviction, volume needs to come in soon.

The importance of this move can be deduced by having a look at the weekly chart of oil. The chart says it all.

UUP - Not surprisingly, with oil and gold being at important levels, the dollar is at important levels too. Hasn't gone anywhere in the last week and unless it breaks the important resistance level marked in the chart, it seems to be forming a top here.

It becomes important to keep an eye on all of the above mentioned levels in the next few days as thee commodities could decide where the markets head from here. Watch out for energy and metal stocks if we do indeed break the important levels. I will be back with a watchlist later tonight.

Take care.

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