Interactive Investor

Analysis: record gold price and a compliant AIM stock

With the yellow metal hitting another fresh high, independent analyst Alistair Strang updates his numbers. He also looks at an interesting small-cap share.

21st May 2024 07:40

by Alistair Strang from Trends and Targets

Share on

Gold ingots and coins 600

Last month, when we reviewed gold, we gave an immediate target of $2,480 with our secondary, if bettered, at $2,500. We noticed the metal surged upward again on Monday, reaching $2,450. It’s certainly in the ballpark of where conventional market behaviour would anticipate some hesitation but once again, we shall reiterate our warning where we don’t expect the markets to hand out the free gift of a short position by the $2,500 level.

It will therefore prove wise to watch for the metal being “gapped up”, as this shall imply the market retains ambitions above $2,500. Already, it started this week being gapped up by $6 at the market open, so we’re already understandably curious.

xauusd200524.jpg

Source: Trends and Targets. Past performance is not a guide to future performance.

In probably every industry, the plethora of rules from government make life difficult and it’s no surprise this has given birth to specialist companies such as Marlowe (LSE:MRL), describing themselves as providing a broad range of compliance software and services in areas which pose a high risk for businesses.

There’s definitely ample justification for a company like Marlowe and their share price is showing early signals it may be about to do something useful.

Traditionally, we like Gap Downs followed by a Gap Up and Marlowe appear to have achieved an (almost) textbook example. The initial Gap Down in November last year breached the immediate Red uptrend. And then, in February this year, the Gap Up breached the share price downtrend in Blue. Typically, we get quite excited with a confirmed GaGa movement and this one is so perfect we almost distrust it.

If we’re strict, we’re supposed to breathlessly announce above 577p should now trigger movements to an initial 726p with secondary, if bettered, at a future impressive 916p.

In fact, our in-house conventional GaGa rules say we should safely announce it’s heading to 916p, regardless of trigger levels. Thankfully, we’re cowards and there may be something important we’ve missed. For now, we’re inclined to keep an eye on them.

mrl200524.jpg

Source: Trends and Targets. Past performance is not a guide to future performance.

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

Related Categories

    AIM & small cap sharesTechnical AnalysisTrading tips and ideas

Get more news and expert articles direct to your inbox