Precious Metal Trade Idea – 16th 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 and 1183 hit with 1173 as next target
Resistance Zones 1213 and 1224 Bullish move taking out 1200 and 1206
RSI Indicator 53 Rebounded above 50 neutral
Stochastic Fast and Slow Neutral zone
Bollinger Bands 1215 and 1181 Looming Breakout – rising BB
Candlesticks Positive Close (Open 1193 Close 1204)
Trade Ideas Dollar weakness / Short covering?

 

Weakness from US economic data sent gold to rally higher. Yesterday low at 1188 gave bulls the impetus to break above psychological level of 1200. Various key supports have provided fertile ground for bulls and dollar weakness propelled it to 1209 (as of the time of writing). We will not rule out that potential breakout is looming in the near term. Break of 1224 will play out a potential IHS while a break below 1176 will target a potential new low.

Yesterday we took a short position (post ECB and US Open) at 1196 with a stop at 1207. The trade has ceased and we would like to remain flat on gold now until a clear break of either direction.

 

Trading Instruments:  Silver                                                                                         Trade Size: 2 contracts

Technical Indicator Daily Chart Reasoning
Support Zones 16.09 and 15.72 61.8% retracement at 16.08 is providing much better support.
Resistance Zones 16.56/16.60 and 17.45 Need 16.60 for higher target
RSI Indicator 49 Heading lower if selling pressure persist
Stochastic Fast and Slow Fast line broke higher
Bollinger Bands 17.23 and 16.13 Converging BB setting next direction
Candlesticks Positive Close (Open 16.18 Close 16.37)
Trade Ideas Sellers retreat after US dollar weakness

 

Looks like we found the reason to celebrate for higher prices as Silver managed to rebound on the back of a weaker US economic data and Dollar bulls retreating. The support at 16.08 proves solid and the corrective rebound has taken the price to move higher – possibly testing resistance at 16.65 as the next ideal target.  Market interest in precious metals has also picked up, probably due to Grexit concern that lead to safe haven buying.

This week, we expect a choppier price action and only a clean break of $ 16.00 or $ 16.90 will confirm our next take.

 

Trading Instruments:  Platinum                                                                                  Trade Size: 2 contracts

Technical Indicator Reasoning
Support Zones 1147/1136 and 1124 Trading in an uptrend line atm
Resistance Zones 1155/1186 and 1196 Retake of 1186?
RSI Indicator 55.14 Creating more rooms to the upside
Stochastic Fast and Slow Bearish Divergence
Bollinger Bands 1177 and 1125 Rising BB indicate uptrend to continue?
Candlesticks Positive close (Open 1151.3 Close 1162.5)
Trade Ideas Indicators suggest selling pressure

 

Since the low in March 2015 was created, Platinum has set on a recovery path. This path leads to higher high and higher low suggesting that an uptrend is in play with a potential target of 1206 should this uptrend continue. Does this warrant a buy at current price with a stop at 1147? We note that resistance at 1192 (100 MA which coincide with 20 WMA) may prove strong but it is still an ideal target should we go long here. Current price is trading above the 20 DMA and 50 DMA.

Given yesterday price action, we are changing our stance to neutral with a slight bullish view that Platinum could test higher numbers.

 

Trading Instruments:  Palladium                                                                                Trade Size: 2 contracts

Technical Indicator Reasoning
Support Zones 746/754 and 761 Uptrend to continue after retest of 754
Resistance Zones 758/778 and 785 20/50 and 100 DMAs
RSI Indicator 49.96 Neutral ground should it reclaim 50
Stochastic Fast and Slow Fast line often lag and has not rebounded
Bollinger Bands 786 and 730 Neutral
Candlesticks Positive close (Open 765 Close 770)
Trade Ideas Gap not filled and IHS back in play?

 

This morning we have revised our plan and decided to close all our short positions for a tiny profit. Yesterday price action has taken Palladium on a positive close with higher high and low compared to Tuesday’s price action.  Palladium often lags and plays a delayed price action, with that in mind we would prefer to wait until a clear signal is available. However, we will not rule out that it is semi bullish as prices are trading above 20 DMA and may target the upper BB.

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