|
Page 12
of 12
|
Gold/Gold Stocks |
|
CONCLUSION:
Price has met its downside target and subsequently it has
rallied above the declining tops line that defined the upper end
of the declining channel. At the same time, most indicators are
giving either neutral, or, bullish readings. Consequently,
we have concluded that in all likelihood the three most likely
scenarios going forward are the following:
1. The bullion will break above resistance and rally to 630, in
that case it will pull the XAU along to new marginal highs. If the
bullion closes above 590, and the XAU can close above 144
over the next 5-10 trading days, then the odds will be better
than even in favor of scenario#1, and we ought to expect the XAU
to test resistance in the 150-160 zone. (see chart below)
2. The bullion may make marginal new highs but the XAU after
overcoming resistance at 135.07, will fail
to follow thru with a close above 140. In
that case the odds will be better than even in favor of
scenario#2, and we ought to expect the XAU to resume its decline
and to test support
in the 119-117 zone. (see chart below)
|
|
 
 |
|
3. Finally, the bullion will fail to make new highs, or,
it may make a marginal new high, and the XAU will fail to
overcome resistance at 135.07. In that case, the odds will
be better than even in favor of scenario#3, and we ought to
expect the XAU to resume its decline and to test support
in the 115-112 zone.
(see chart above)
|
|
Based upon our conclusions, we are
expecting a rally in the XAU at least up to the 135 level, and
therefore, we are
currently on a short-term "BUY" signal. In our managed accounts which are
focused exclusively on Precious Metals we took
positions on Thursday, and Friday of last week,
committing 30% of our capital to the long
side, with sell stops below Friday's lows. The picture below
shows the current holdings (per 100k of starting capital) in the
accounts under the program. |
 |
|
STARTING EQUITY 1/3/2006:
$100,000.00 |
ACCT EQUITY AS OF 3/24/06:
$121,583.21 |
ACCT. Y-T-D RETURN
21.58% |
|
XAU OPENING PRICE ON 1/3/2006:
130.97 |
XAU CLOSING PRICE ON 3/24/06:
132.38 |
XAU Y-T-D RETURN:
1.07% |
|
|
|
MANAGED ACCOUNTS DISCLOSURE: Past
performance is not a guarantee of future results. The firm has made no promises
or guarantees that it will be able to match the results that it achieved in its
model portfolios for any previous period. However, the strategy that will be
employed in the client's account, will very much resemble the strategy employed
in the management of the model portfolio. It should be understood, that a
particular strategy/methodology which has provided positive returns in the past,
may not provide similar returns in the future The firm emphasizes that its
investment style is speculative and entails substantial risks. There can be no
assurance that the client's investment objective will be achieved or that the
firm's investment strategy will be successful at all. In particular, the firm's
use of short sales and option transactions, in certain circumstances, could
result in significant losses to the client's account. The client should consider
this investment as a supplement to an overall investment program and should
invest only if he/she is willing to undertake the risks involved. The client
could lose some or all of the initial investment.
|
|
|
|
NEXT
PAGE
(The
rest of the report is reserved for
clients only)
http://www.aegeancapital.com
|
