Gold - Sitting On Key Support

Above is a weekly chart of gold and in the lower panel is the stochastic oscillator. This market has been in a beautiful uptrend making a clear series of higher highs and higher lows. Right now GLD is testing a very significant support level which is comprised of trendline support and the high from last May.

You'll notice the stochastic oscialltor is in the buy zone and over the past 3 years every one of these buy signals were extremely profitable. The only thing that bothers me is if the gold market has reached an accelrated climax last month which would indicate a top.

So far it appears that this support area is holding which may offer a low risk opportunity for a long trade.  The upside objective would be a test of the high from last month. Obviously the protective stop would be a breaking of the trendline which makes for a low risk trade. The key to remember is if you do get long, you MUST keep your stop right below support because if that support level is broken, we could see a rapid decline.