Gold as an alternative option
The price of Gold has been consolidating from its high on 5/12/06. Coming from a high price of roughly $721.00, it has been sold down its current level of $598.00. This move of roughly 129 points, or a downward move of 17.7%. Considering this, you will see on the chart above that a support level of 560 to 576 has been sustained on the short term. Price action for Sept-Oct.'06 has remained in-line with the support level of June'06. While the Dow Jones Industrial Average has taken off, leaving a bearish divergence from the traditional Dow Theory, one might take some caution here and place some safe bets on Gold. Also, considering that the international political arena is rife with tensions from North Korea and Iran, gold might be an option for people to put recently gained equity profits to work in the near future.

The oscillators also tell of some interesting signals. The RSI for gold is turning upward and might break the downward bias it has been on since May-June'06. The coming days/weeks will confirm if a gold rally is evident. The Chaiken oscillator is also suggesting that money has been moving into gold at these levels. The channel in the Chaiken oscillator pointed out in the chart above might suggest that the sell off might end soon and buyers might be coming back into the fray. Yet again, the coming price action and technicals must be followed in the coming days/weeks to confirm this bullish trend reversal.

It might be wise to buy some of the underlying companies with in this sector as well, before the street begins to see this turn of events. Some names to look out for would be:

NTO - Northern Orion Resources Inc.
AEM - Agnico Eagle Mines Ltd.
ABX - Barrick Gold Corp.
PAAS - Pan American Silver Corp.
RNO - Rio Narcea Gold Mines Inc.
SA - Seabridge Gold Inc.
VGZ - Vista Gold Corp.
OZN - OreZone Res. Inc.  ¶ 12:28:00 PM