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||1193/1199 & 1205||April high & low Fib retracement|
|Resistance Zones||1211 and 1223||Need to close above 100 ma and 200 ma|
|RSI Indicator||53.65||A neutral zone|
|MACD||Lack of momentum|
|Bollinger Bands||1216 and 1184||Stabilising|
|Candlesticks||Positive Close (Open 1199.83 Close 1211.65)|
|Trade Ideas||Target 200 ma at 1223.45|
As mentioned before, the all-time high equity market and a strong dollar do not go hand in hand. We are expecting this trend to continue – a trend where every FOMC meeting will rock the confidence in both (equity and USD) bull camps. The benefactor in this game is gold as hot money flow in to take advantage of the cheaper alternative.
Gold took out 1209 resistance easily and broke above 1214 but then profit taking kicks in as the FOMC draw closer. Expect a period of consolidation with increased volatility pre and post FOMC as traders take position on the dollar. Over the last two weeks, we have seen continued weakness in the dollar camp but all could change should a hawkish remark is made.
In the short term, gold can continue higher as long as it trade above 1193 level and next ideal target is the resistance at 1224 level. Only a clean break and close above 1224 will allow the bulls to charge higher. Take note that price action does not move in a straight line and anything can happen today with a dump and pump or pump then dump scenario.
Trading Instruments: Silver Trade Size: 2 contracts
|Technical Indicator||Daily Chart||Reasoning|
|Support Zones||16.00/16.28 and 16.50||Fib retracement what was resistance now support|
|Resistance Zones||16.67 and 17.00||Next resistance are 200 wma|
|RSI Indicator||52.73||Regained just above 50|
|Stochastic Fast and Slow||Slow line rising, need both lines to thread higher|
|Bollinger Bands||16.99 and 15.67||BB moved lower – Further weakness?|
|Candlesticks||Positive Close (Open 16.33 Close 16.59)|
|Trade Ideas||Side line for now due to FOMC|
Short term price action from Silver is rather positive. Next line of resistance to overcome is the 200 wma at 16.67 and then the upper Bollinger band which currently sits on the downtrend line of January and April high at 16.87 could find sellers. Only a decisive break and close above 17.00 and 17.45 will give bulls the confidence to retest higher.
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.
We are looking to reduce risk by placing only 1 short order at 16.87 stop 17.37 with a target at 16.07. Should price pull back to 16.57 then look to raise stop to B/E.
Trading Instruments: Platinum Trade Size: 2 contracts
|Support Zones||1112||Set a low of 1116 and 1117. Higher low since the start of 2015 but lower high too|
|Resistance Zones||1185||100 ma|
|RSI Indicator||51.8||Neutral again|
|Stochastic Fast and Slow||Bearish Divergence continues|
|Bollinger Bands||1177 and 1127||Stabilising|
|Candlesticks||Positive close (Open 1141.7 Close 1154.2)|
|Trade Ideas||Corrective rally – shorting opportunities?|
We are not denying the above observation that Platinum has created higher low but lower high. However, 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.
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 and 800.38||100 ma and 200 ma holding upside|
|Stochastic Fast and Slow||Fast line above slow line|
|Bollinger Bands||786 and 746||Lower BB moved higher|
|Candlesticks||Negative close (Open 774.1 Close 774.5) another doji|
|Trade Ideas||Gap not filled and another attempt at HIS?|
Afraid, our stance remains the same on Palladium. Key levels at 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.
Meanwhile, the 4 hourly charts indicate strong range trading from the start of April. Should this continue, expect sellers to appear between 782 to 790 levels to target 750 to 760 levels as limit. With that in mind, we are placing a sell order at 785 stop 793.5 and target 755.
Given that it is range trading between 790 and 750, only a breakout will determine the next direction on Palladium. Only a break below 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.