A number of subscribers have emailed me recently about gold and gold miners. Fair enough in this current market environment, so this morning I am taking a look at the charts and indicators of AngloGold Ashanti Ltd. (AU) .
In the daily bar chart of AU, below, we can see a low in August followed by an impressive rally. AU closed above a flat 50-day moving average line in September and above the still declining 200-day line in October. In November the 50-day line crossed above the bottoming 200-day line for what is commonly called a bullish golden cross.
The daily On-Balance-Volume (OBV) line turned up from August and its rise tells us that buyers of AU have been more aggressive the past four to five months. In September the trend-following Moving Average Convergence Divergence (MACD) oscillator moved above the zero line for an outright go long signal.
In the weekly bar chart of AU, below, we can see a long downtrend that has ended and now prices are above the slightly rising 40-week moving average line.
The weekly OBV line is rising and the weekly MACD oscillator is above the zero line. All bullish.
In this Point and Figure chart of AU, below, we can see a double-top breakout at $12 and a potential price target of $22 being projected.
Bottom-line strategy: The price of AU looks extended but that does not mean we will get a dip to buy. Traders looking to get some exposure to precious metals could do some buying at current levels and then wait for a while. A downside break for the Dollar Index will be a signal to buy more, in my opinion.