Precious Metal Trade Idea 8th April 2015

Bullion Daily

The following information is a guideline (trading plan) and should not be treated as financial advice.

Trading Instruments:  Gold                                                                                          Trade Size: 2 contracts

Technical Indicator Daily Chart Reasoning
Support Zones 1193 / 1183 and 1173 Retracement line with additional short term support at 1207 and 1201
Resistance Zones 1223 / 1232 and 1244 Daily 200 MA big obstacles
RSI Indicator 57 Neutral ground
Stochastic Fast and Slow 69 Still in positive territory
Bollinger Bands 1226 and 1147 Rising BB with rooms to upside
Candlesticks Negative Close (Open 1214 Close 1208)
Trade Ideas Consolidating awaiting FOMC for more direction

 

Gold held above $ 1200 going into today’s FOMC minutes, giving gold bull a slight edge. Despite a robust dollar strength and stronger equity market, the yellow metal did not suffer or even close the open gapped. It is best to cautious as prices could move quickly in either direction.

For the bull camp, taking out 1216 and 1224 will allow them to target 1232 (200 DMA) followed by $ 1244 area. Stop can be place at $ 1207 and should price break above 1224 then raise stop to breakeven. Trailing stop is recommended here.

Meanwhile, bears need to take out 1186 and 1177 to confirm another leg down to test 1155 and previous low of 1140. Should the price close below 1186, a short position can be taken with a stop at 1200. Raise stop loss to breakeven once price break below 1177 area to minimise risk.

Trading Instruments:  Silver                                                                                         Trade Size: 2 contracts

Technical Indicator Daily Chart Reasoning
Support Zones 16.60/16.35 and 16.09 Retracement line from previous low
Resistance Zones 17.00/17.35 and 17.45 Previous high
RSI Indicator 55.5 Neutral
Stochastic Fast and Slow 45.7 Fast line crossed lower, attempting higher
Bollinger Bands 17.58 and 15.47 Rising BB
Candlesticks Negative Close (Open 16.96 Close 16.83)
Trade Ideas Pullback has been limited – consolidating and awaiting data for next direction

 

There is a potential symmetrical triangle in the making which often suggests that the current trend is set to continue. However, further confirmations from the other indicators are needed and it will depend on the overall momentum. The RSI and stochastic is holding up in a neutral territory while the Bollinger Bands are rising.

Bulls need to see a clear break above 17.32 and 17.45 which could potentially swing the prices higher to target 18.02 and 18.45. Stop loss at 16.76 will give ample of room for the trade to materialise only if the breakout is confirmed. To minimise risk, we can raise stop to breakeven if prices managed to trade above 17.65.

Shorting silver at the current setup is slightly riskier and only a break of 16.50 will give rooms for the bears to target 16.15. If the sell-off continues then 15.70 will be the next ideal target.

 

Trading Instruments:  Platinum                                                                                  Trade Size: 2 contracts

Technical Indicator Reasoning
Support Zones 1147/1136 and 1124 Retracement from previous low of 1086
Resistance Zones 1186 and 1196 Previous high and Daily 100 MA
RSI Indicator 56.87 Moving higher within a rising trendline
Stochastic Fast and Slow 79.59 Positive territory
Bollinger Bands 1179 and 1096 Rising BB – upside limited?
Candlesticks Negative close (Open 1172 Close 1167)
Trade Ideas Price held well and gap not close

 

Yesterday action in Platinum has been rather confined despite a gravestone doji at the start of the week. Support is seen at 1167 while upside seems limited for now. Other indicators are showing a positive momentum with a potential to target 1196.

Only a break above and close above 1210 will give bulls the impetus to retest 1255 and 1289.

However, we are worried that current setup is a short rally with more downward pressure in store. Only a clear break above 1205 (weekly chart) will neutralise this downtrend. Failure at $ 1186 again could set a short term double top and prices may retest the lower trend line at 1150.

 

Trading Instruments:  Palladium                                                                                Trade Size: 2 contracts

Technical Indicator Reasoning
Support Zones 756/749 and 743 Retracement from previous low at 722.15
Resistance Zones 777/ 780 and 786 Previous high/ 50 DMA and 100 DMA
RSI Indicator 49.52 Hitting resistance mark at 50?
Stochastic Fast and Slow Positive Fast line crossed higher
Bollinger Bands 797 and 727 Rooms to manoeuvre around the BB
Candlesticks Open 766 Close 767
Trade Ideas Trading above the Gap

 

Palladium price action is rather delayed against the other precious metal. A bearish candlestick is registered from yesterday action and a clear break below 762 could accelerate more selling pressure. A break below 750 will allow the bears to target 740 to close the gap. At the moment, we are taking a short position to target 756 and 743 respectively.

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