Ralph Lauren’s (RL) chart has been bullish for some time now, but recent developments may merit some negative deltas. RL’s long term trend line has been touched many times by pullbacks, but the action as-of –late is concerning. RL seems to be spending a lot of time digesting the $150 level; this price coincides with a major trend line drawn from the market low in 2009. It is interesting to note that most stocks have lost their 2009 market bottom trend line. The prior two touches led to 50% runs in the stock and a higher high, but the touch in July only lead to a 20% run and a top below the all time high. RL has been between $150 and $160 since Aug. of 2012 and has formed a nice rounded top that flows into the aforementioned major trend line. This is a major decision point in the stock and if one believes that the cliff will take down the market, RL’s 1.5 beta will be a nice stock to short.

FB does not have a lot of ‘likes.’ After the IPO debacle, shares slid to a low of $17.55, but have tacked on $10 since. This has been a near 55% rally in the stock in less than two months; courtesy of shorts’ getting squeezed. Short interest has dropped to 4.2%. In short, if the US goes off the fiscal cliff, FB may transition to the lowest volume distribution and cycle back down to lows as shorts get back into the name.

PXD has been in a horizontal range since the better part of September. Nothing has moved the stock out of its barcode-type pattern, but the looming cliff may. The upside to this range has been $110 and the downside has been $101. The cliff may provide the catalyst that makes PXD break $101, and should that happen, PXD may have a date with $95.

The RL, FB, and PXD charts are below.

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 In the U.S., economic uncertainty over the fiscal cliff may negatively impact gold prices through 2013.  If Washington reaches a deal that averts the cliff, then gold demand may shrink as the outlook for economic growth within the U.S. improves.  Earlier this month Goldman Sachs cut its 3, 6, and 12-month forecasts for gold prices, which are currently near $1,700 an ounce. They were cut to $1,825 per ounce, $1,805 per ounce, and $1,800 per ounce respectively.  The bank stated that, “Our expanded modeling suggests that the improving U.S. growth outlook will outweigh further Fed balance sheet expansion, and that the cycle in gold prices will likely turn in 2013.” 

The European bank BNP Paibas also cut its 2013 forecasts for gold prices.  BNP claimed its lowered expectations were based on cautious market sentiment. BNP cut its 2013 forecast to $1,865 an ounce from $1,900 an ounce.  Conditions in the Eurozone remain unstable as European nations struggle to recover from the recession.  The European region may find it difficult to return to a state of growth by the end of 2013.  

The lowered expectations of growth for the global economy, U.S. economic growth, and uncertainty in the Eurozone will drive prices for gold down in 2013.

Author: Tyler Sciortino

Current Student at Roosevelt University, Majoring in Finance.

Contact for questions or inquiries at tsciortino@mail.roosevelt.edu