The following information is a guideline (trading plan) and should not be treated as financial advice. Not advice but banter and active in sharing trade ideas via twitter @sugardaddyFED
Trading Instruments: Gold Trade Size: 2 contracts
|Technical Indicator||Daily Chart||Reasoning|
|Support Zones||1173/1183 & 1193||Not ruling out a possible retest of 1193|
|Resistance Zones||1211 and 1222||Need to close above 100 ma and 200 ma|
|RSI Indicator||52.11||A neutral zone|
|MACD||Lack of momentum|
|Bollinger Bands||1216 and 1184||Stabilising|
|Candlesticks||Negative Close (Open 1211.65 Close 1204.61)|
|Trade Ideas||Target 200 ma at 1223.45|
Sell off in the US dollar mark the beginning of a retreat by the dollar bulls. In addition, the “Sell in May and Go Away” seems to have hit the equity market pretty hard. It has been months that dip buying and what we like to call “Super V” recovery seems to be the norm. Every dip in US and European market has been bought and equity fever has produced many so called trading experts – even the banana sellers in China could do it too! All those easy money has to find yields and we are looking at a certain market phase of sudden euphoria and now a slight panic.
However, the yellow metal failed to perform and rather in its “transitory” mode after the release of the FOMC statement. Both currency and equity market seems to outrun the release of the statement and it is rather obvious that the Federal Reserve is in no state to do any rate hike in June and possible delay is envisaged. Lack of interest in the precious metal complex continues to dampen any real price action that could substantially lead to a break out of the price range.
In the short term, gold can continue higher as long as it trade above 1193 level and next ideal target is the resistance at 1224 level. Only a clean break and close above 1224 will allow the bulls to charge higher.
Trading Instruments: Silver Trade Size: 2 contracts
|Technical Indicator||Daily Chart||Reasoning|
|Support Zones||16.00/16.28 and 16.50||Fib retracement what was resistance now support|
|Resistance Zones||16.87/17.00 and 17.21||50 % Fib, then the psychological level then the 200 ma|
|RSI Indicator||54.79||Regained above 50. Moving higher?|
|Stochastic Fast and Slow||Slow line rising, need both lines to thread higher|
|Bollinger Bands||16.99 and 15.67||Stabilising|
|Candlesticks||Negative Close (Open 16.59 Close 16.55)|
|Trade Ideas||On course after FOMC = Strength?|
Silver continue to consolidate in the symmetrical triangle formation, posting lower high and higher low. Breakout in either direction is possible but need a solid price action to validate this. If Silver can trade and close above the 200 dma currently at 17.21 then it may stand a good chance to retest January high at 18.45. Only a decisive break and close above 17.00 and 17.45 will give bulls the confidence to retest higher.
On the other hand, a break below 15.50 will play the Short scenario with possible target of previous low and potentially much lower.
As long as it is still trading in the triangle, prices can whipsaw and only a clear breakout will dictate the next direction. Will we see a solid move in May? Bear in mind that last 2 years May 2013 and 2014 saw silver dipped lower before it resume higher in June!
Trading Instruments: Platinum Trade Size: 2 contracts
|Support Zones||1086 and 1117||March low and April low|
|Resistance Zones||1184 and 1186.6||100 ma and 50% fib of January high|
|RSI Indicator||50.5||Breaking below 50?|
|Stochastic Fast and Slow||Bearish Divergence continues|
|Bollinger Bands||1177 and 1127||Stabilising|
|Candlesticks||Negative close (Open 1154.2 Close 1150.5)|
|Trade Ideas||Corrective rally – shorting opportunities?|
Short initiated at 1162 with a stop at 1172 target the following area 1138 and 1128.
The upside is limited due to the down trend line (weekly chart) and on that basis, further weakness is envisage. As long as prices trade below the 50% Fib retracement from January high 1186.60 then sellers have control. We continue to look for a corrective pullback higher and look to sell on rallies and only a break above 1186.6 will invalidate this stance.
Trading Instruments: Palladium Trade Size: 2 contracts
|Support Zones||746/754 and 761||Low hit at 752.50 (double bottom) and previous Fib is back in play|
|Resistance Zones||782/786.40 and 799.97||100 ma, previous high and 200 ma holding upside|
|RSI Indicator||55.94||Heading higher|
|Stochastic Fast and Slow||Fast line above slow line|
|Bollinger Bands||787 and 749.76||Rising BB could indicate more upside?|
|Candlesticks||Positive close (Open 774.5 Close 779.5)|
|Trade Ideas||Ready to lift off? 200 ma in sight|
Palladium has moved higher and took out the retest level we mentioned at 777. Now it needs to break and close above the 100 ma at 782 to give it more impetus to move higher. Key levels at 745 to 755 area is now strong support zone and only a break below that will give the sellers more control. Palladium could resume higher after it rebound off the 50% retracement high of 786.50. Next target for Palladium to conquer are top of the BB line 787 and the 200 ma at 799.97 followed by 846??
Meanwhile, the 4 hourly charts indicate strong range trading from the start of April. Should this continue, expect sellers to appear between 782 to 790 levels to target 750 to 760 levels as limit. We are waiting for further confirmation on how Palladium will react.
Trade Palladium with care as this metal does not play by the rule.