Precious Metal Trade Idea – 10th April

Silver 10th April 4 hr

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 twice and moving higher
Resistance Zones 1223 / 1232 and 1244 Short term resistance zone stands at 1207 1211 area
RSI Indicator 54 Back above 50 mark
Stochastic Fast and Slow Fast line still below slow line
Bollinger Bands 1223 and 1157 Contracting BB – breakout?
Candlesticks Negative Close (Open 1201 Close 1194)
Trade Ideas Gap needs filing at 1155

After 4 consecutive days of selling, buyers flocked in during Asia and London time zone. This is despite a strong dollar and European equity market hitting new record high. Going into the weekend, we see relieve in the tension between Iran and Saudi – a possible peace treaty. Earning Seasons in the US has also raised concern that a pullback is due but price action has not materialised.  No change from FOMC and dollar strength, gold could continue range trading.

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 Low was 16.14 that provided support
Resistance Zones 16.68/17.00 and 17.45 Previous high/psychological 17 area/ 20, 50 and 100 DMA = Areas to short?
RSI Indicator 49.1 Below 50 could face resistance
Stochastic Fast and Slow Fast line still below the slow line
Bollinger Bands 17.46 and 15.70 Rising lower BB – contracting
Candlesticks Negative Close (Open 16.48 Close 16.18)
Trade Ideas Upside capped?

Found support at the 61.8% retracement line and frenzy buying has taken prices higher when London opens. As we write this report, 16.59 (38.2%) is acting as resistance and a break above means silver back in the neutral zone. There are layer of resistance at 200 DMA 16.83, psychological level of 17.00 and this week high of 17.33. Double top formation on the daily chart continues to play a significant role and only a break above will see a flurry of short covering.

Same commentary as yesterday “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. “We are wary that current rise in price could just be a short covering rally.

However, short term recovery is a sell signal on Silver and we maintain a short position at 16.75 with a risk of 20 points to stop 16.95 targeting 16.09 area and 15.85. Should the short fail to materialise then we need to revise our stance.

Trading Instruments:  Platinum                                                                                  Trade Size: 2 contracts

Technical Indicator Reasoning
Support Zones 1147/1136 and 1124 Untouched for now
Resistance Zones 1167/1186 and 1196 Previous high and upper BB at 1181
RSI Indicator 54.72 Holding above 50 level
Stochastic Fast and Slow Fast line still below Slow line
Bollinger Bands 1181 and 1102 BB trending higher
Candlesticks Negative close (Open 1161.5 Close 1154)
Trade Ideas Price bounced off 1152.50 – consolidating?

Price rebound higher after support was found at 1152.50 and previous support now resistance is holding it at 1167. Our short term view is that prices could within the pennant (4 hr chart) before testing higher 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. We need to see how platinum close for the day and wary of the weekly candlestick.

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.

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 777 Taken out 756 763
RSI Indicator 50.73 Neutral while above 50
Stochastic Fast and Slow Fast line still in positive zone
Bollinger Bands 788 and 729 BB contracting
Candlesticks Positive close (Open 754.9 Close 760.8)
Trade Ideas Gap not filled but forming an inverse H&S on daily?

We have closed all Short position on Palladium with a loss of 1 point. Prices reacted positively after it found support and failed to fill the gap. At the moment, we will monitor the price action and look to make our next move should the opportunity arise. Daily chart is creating a potential Inverse Head & Shoulder. Should this materialise, a break above 777 could start a rally to test 824.

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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