Precious Metal Trade Idea 9th April

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 1193 support tested once
Resistance Zones 1223 / 1232 and 1244 Short term resistance zone stands at 1207 1211 area
RSI Indicator 49.9 Broke below 50 = bearish
Stochastic Fast and Slow Fast line crossed lower = bearish
Bollinger Bands 1224 and 1152 Contracting BB
Candlesticks Negative Close (Open 1212 Close 1201)
Trade Ideas Post FOMC Dollar strength – Gold Down

Gold 4 hr 09th April

With a Hawkish FOMC minutes, dollar strengthen and gold bulls gave away their slight advantage of trading above $ 1200. Selling pressure piled on after it broke below 1207 which was support now resistance and trade below the psychological level of 1200. Between the ranges of 1186 to 1206, gold is in a rather neutral state and a break in either direction will initiate a new direction. Gapped closed and initial support was found at 1203 but eroded after a strong dollar rally. Could the next gap at 1155 be the next target?

There is a lot of work for the bull to recover and only a break above resistance level such as 1200, 1207 and 1212 will give them any slight edge to retest 1224 again. We fear that they could run out of strength and retreat until we get another set of negative US economic data.

Taking out 1189 is a start and a small short position can be initiated. Should selling continue, look to add another short on the break of 1177. Below that, we see minor support at 1167 followed then by 1155 areas where support from daily BB could ease the selling pressure.

Trading Instruments:  Silver                                                                                         Trade Size: 2 contracts

Technical Indicator Daily Chart Reasoning
Support Zones 16.60/16.35 and 16.09 Took out support at 16.60 and 16.35. Is 16.09 next on the cards?
Resistance Zones 17.00/17.35 and 17.45 Previous high/psychological 17 area/ 20,50 and 100 DMA = Bearish
RSI Indicator 43.89 Below 50 = Bearish
Stochastic Fast and Slow Fast line crossed lower = Bearish
Bollinger Bands 17.51 and 15.57 Rising BB – contracting
Candlesticks Negative Close (Open 16.83 Close 16.48)
Trade Ideas Gap closed followed by more selling – Double top with more downside

 

Double top formation has prevailed and Silver prices plunged lower under various selling pressure. Initially, prices was holding up well at 16.80 levels but selling accelerated on the lack of catalyst to push it higher. Post FOMC – dollar friendly data has added more ammunition for the bears to take it lower, breaking below previous low of 16.55 (what was support now resistance).

We are not sure if there are any bulls around for silver until the next support at 16.09 or even 15.85 levels is hit. To relieve the selling pressure, we need silver to trade back above 16.70 to neutralise the selling momentum.

However, short term recovery is a sell signal on Silver and we look to place a short position at 16.75 with a risk of 20 points at 16.95 targeting 16.09 area and 15.85.

 

Trading Instruments:  Platinum                                                                                  Trade Size: 2 contracts

Technical Indicator Reasoning
Support Zones 1147/1136 and 1124 Retracement from previous low of 1086
Resistance Zones 1167/1186 and 1196 Previous high and Daily 50 and 100 MA
RSI Indicator 52.87 Lower and could retest 50 area
Stochastic Fast and Slow Fast line crossed lower at 62 atm
Bollinger Bands 1179 and 1099 BB with limited upside – rising lower BB
Candlesticks Negative close (Open 1167.6 Close 1161.70)
Trade Ideas Gap close right on spot 1152.50 – where to next?

 

We warned about the gravestone doji and a gap that has yet to be close. Yesterday price action seems to honour the 2 technical indications whereby selling pressure is warranted by a stronger dollar. Support at 1167 gave way and now that will act as resistance in the short term. Given that prices has moved lower, could platinum stage recovery to retest 1190? There is a potential bullish pennant and only a break below 1151 will invalidate this.

Bulls need to retake 1167 followed by 1175 and 1185 to aim for higher numbers.  A buy signal is warranted if it can break and close above 1167 with stop at 1157 to target 1175 and 1185.

Current chart setup is neutral as price is holding on above the 50 DMA. Only a break below $ 1151 will turn us negative to target 1141 which is the 100 DMA at the moment. Price should hold at 1141 and if not then platinum could be in real trouble. Expect 1141 to hold and a good buying opportunity.

 

Trading Instruments:  Palladium                                                                                Trade Size: 2 contracts

Technical Indicator Reasoning
Support Zones 756/749 and 743 Both 756 and 749 tested. Can it hold now?
Resistance Zones 756/763 and 777 Previous high
RSI Indicator 45.46 Failed to go above 50 = Bearish
Stochastic Fast and Slow Fast line holding on above the slow line
Bollinger Bands 792 and 727 Upside BB squeezed lower
Candlesticks Open 767 Close 754
Trade Ideas Gap not filled – Slightly bearish

 

We initiated a short position as of 8th April at 767 stop 786 target 756 and 743. First target is complete and we also raised stop to break even. Daily chart is showing a bearish candlestick after it posted a gravestone doji. Our motivation in this short position is for the price to play catch up and fill the gap.

If the gap is filled this week and prices remained weak, the weekly chart will paint a strong bearish candlestick that could spell more downside. However, expect support at 738 and 725 area

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