There's an interesting situation going on in the streetTRACKS Gold Shares (GLD) and its relationship to its key moving averages.  Let’s notice that since the January 5 low at 59.66, the GLD has climbed above its 9-, 50- and 200-day moving averages, and for the past three sessions appears to be consolidating just above the moving average cluster.  This action is potentially extremely constructive, largely because the current consolidation has taken the form of a Bull Flag, which should resolve itself in a thrust to the upside.  Such a thrust off of the 50-day MA typically provides more power to the underlying move.  In this particular instance, more power will be welcome as the GLD attempts to hurdle its major May-January resistance line at 63.50.  If the trendline is successfully hurdled, the GLD will project next to the 68 target zone.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.