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||1193 / 1183 and 1173||Support at 1173 held and prices bounced higher|
|Resistance Zones||1211 and 1223||Need to close above 100 ma and 200 ma|
|RSI Indicator||52.59||A neutral zone|
|MACD||Lack of momentum|
|Bollinger Bands||1214 and 1185||Lower BB line continue to rise, providing support|
|Candlesticks||Positive Close (Open 1179.89 Close 1199.83)|
|Trade Ideas||Range Trading again|
Last Friday huge sell-off was temporary as yesterday price action indicates short covering in a fashion that turned heads. US dollar weakness and sell-off in the equity market after the new all-time high has funnelled some of the money away to safe haven assets. Given the lack of market interests in the yellow metal, a sudden spike in volume is sufficient to change the course. Bargain hunters appear within the lower Bollinger Band area and given that it is not a corrective move, the break above 100 and 200 ma on the 4 hour chart has given buyers some comfort to test higher prices. Once again, sellers came in at the well-known 1207 – 1209 area which will be an important resistance as this range trading continues.
Our observation indicates that gold is not ready to get out of this comfort zone (1173 – 1209) and both bulls and bears lack conviction. Catalyst for another big move may soon appear from the release of US economic data this week. The US dollar is testing key support line and its recent weakness is no doubt another indication that Federal Reserve is not ready to hike interest rate – thus a dovish Fed is expected.
Gold could be gearing up for a break in either direction. Depending on the correction in the US dollar and equity market, safe haven bids are the current play as smart money finds gold a cheaper alternative albeit on a temporary time-scale.
Trading Instruments: Silver Trade Size: 2 contracts
|Technical Indicator||Daily Chart||Reasoning|
|Support Zones||16.00 and 16.19||The low came in at 15.59|
|Resistance Zones||1650/16.67 and 17.00||Next resistance are the 100 and 200 ma|
|RSI Indicator||52.04||Regained just above 50|
|Stochastic Fast and Slow||Breakout higher|
|Bollinger Bands||17.05 and 15.63||BB moved lower – Further weakness|
|Candlesticks||Positive Close (Open 15.77 Close 16.33)|
|Trade Ideas||Looking to Short the metal on a move higher|
We missed out to go long on Silver by .04 as we set 15.55 while the low was 15.59. As mentioned above, Silver prices caught buyers and prices trade above psychological level of 16.00 and took out 20 ma at 16.20 and 50 ma at 16.32 but resistance came in only at 100 ma at 16.50.
Our stance is clear that a weak global demand for Silver due to lack of economic growth will stifle any rise in prices. The odd event of higher prices are often speculative positioning and safe haven bid and with that in mind we may look out for selling opportunities. In the short term, any rise in price could be subject to weakness in the US dollar or possible correction in the equity market.
Only a break and close above 17.45 will give bulls the opportunity to ride the market higher. Should it break below 14.45 then it will created big damage on the weekly and monthly trend line.
Trading Instruments: Platinum Trade Size: 2 contracts
|Support Zones||1112||Price did not revisit 1112 but set a low of 1116 and 1117|
|Resistance Zones||1151||Did not close above 1151|
|RSI Indicator||46.89||Bearish but not oversold yet|
|Stochastic Fast and Slow||Bearish Divergence continues|
|Bollinger Bands||1177 and 1126||Stabilising|
|Candlesticks||Positive close (Open 1121.5 Close 1141.7)|
|Trade Ideas||Corrective rally – shorting opportunities?|
The daily Platinum chart has successfully created a lower high and lower low since the beginning of April. 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 100 ma 1186.11 then sellers have control. In addition, the Fib retracement of January high to March low also indicates rejection from 50% at 1186.60 and we are expecting a retest of 38.2% which stands at 1162.91. This area will be an interest for us to short Platinum with a stop at 1173 and target 1100.
We continue to look for a corrective pullback higher and look to sell on rallies. Further weakness is still in store given that the indicators are just turning lower but we expect a small pullback possibly retest 1142 and a high of 1160.
A break and close above 1136 may give this pullback further leg to test higher and only if it closes above the weekly 20 ma at 1182.57 then it will give rooms for buyers to enter. Meanwhile, the Bears might try to take out the weekly lower BB at 1102 or even retest previous low at 1086.20.
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||783||200 ma holding upside|
|Stochastic Fast and Slow||Fast line above slow line|
|Bollinger Bands||786 and 743||BB fast converging for a Breakout?|
|Candlesticks||Positive close (Open 773.4 Close 774)|
|Trade Ideas||Gap not filled and another attempt at HIS?|
A corrective pullback has happened on the bounce from 752.50. The metal is adamant that it wants to make a point that it will not fill the bloody gap at 740. Instead, the 745 to 755 area is now strong support zone and only a break below that will give the sellers more control. Meanwhile, Palladium could resume higher after it rebound off the 50% retracement high of 786.50. With that in mind, we cannot rule out a retest of 777, top of the BB line 786 or the 200 ma at 800.84.
Given that it is range trading between 790 and 750, only a breakout will determine the next direction on Palladium. Only a break of 746 may indicate further weakness is in store but if it closes anything above 790 and daily 200 ma at 800.80 will set a buy signal.
Trade Palladium with care as this metal does not play by the rule.