I thought that gold bugs in the subscriber base might be interested in the goings on with two primary gold royalty companies, especially due to our current ‘unconfirmed’ status on the gold sector. This update puts aside all the wordy analysis to date on the miners and notes two ‘royalties’ that are in bullish looking setups.
First a look at the weekly FNV-RGLD ratio. As a bottom feeder at heart, I like FNV best since its previous relative momentum has been completely neutralized down to support, into what looks like a potential bottoming pattern.
Nominal FNV (daily) is in what looks like an Inverted Head & Shoulders pattern and has been testing the neckline over the last few days. It thus far holds. I would not be at all surprised if it failed the neckline in order to test the SMAs 50 & 200. But as of now, it’s a bullish pattern with an intact neckline.
The weekly chart shows a bigger picture, including an intact uptrend (green arrows) after the stock never got near the implied target of the shaded bearish topping pattern from 2016. That measured to around 40. So, is FNV on a breakout to new glory or is this a suck-in before new lows come about? These are the financial markets and so, only they have the answer. But it’s a bull pattern and an intact neckline at this moment. Also, MACD and RSI look good.
As for RGLD, it’s weekly chart is in a ‘W’ pattern, which is also a bullish one. As with FNV and its IH&S, it is testing support to this ‘W’ pattern. As with FNV, MACD and RSI look okay.
I am not going anywhere with this, other than reporting what I see in a sector that I think is going to get its day in the spotlight before too long. Are the quality royalties leaders? Is their status above the February highs (along with many individual smaller and more speculative names, but unlike the major indexes and ETFs) a positive divergence to the sector? Valid questions.
Right now I am just digging up questions for our ongoing perspective. Let’s see if FNV and RGLD are able to hold their respective support levels.