Precious Metal Trade Idea – 30th April

Bullion Daily

happy yellen

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 1173/1183 & 1193 Not ruling out a possible retest of 1193
Resistance Zones 1211 and 1222 Need to close above 100 ma and 200 ma
RSI Indicator 52.11 A neutral zone
MACD Lack of momentum
Bollinger Bands 1216 and 1184 Stabilising
Candlesticks Negative Close (Open 1211.65 Close 1204.61)
Trade Ideas Target 200 ma at 1223.45

Sell off in the US dollar mark the beginning of a retreat by the dollar bulls. In addition, the “Sell in May and Go Away” seems to have hit the equity market pretty hard. It has been months that dip buying and what we like to call “Super V” recovery seems to be the norm. Every dip in US and European market has been bought and equity fever has produced many so called trading experts – even the banana sellers in China could do it too! All those easy money has to find yields and we are looking at a certain market phase of sudden euphoria and now a slight panic.

However, the yellow metal failed to perform and rather in its “transitory” mode after the release of the FOMC statement. Both currency and equity market seems to outrun the release of the statement and it is rather obvious that the Federal Reserve is in no state to do any rate hike in June and possible delay is envisaged. Lack of interest in the precious metal complex continues to dampen any real price action that could substantially lead to a break out of the price range.

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.

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 16.87/17.00 and 17.21 50 % Fib, then the psychological level then the 200 ma
RSI Indicator 54.79 Regained above 50. Moving higher?
Stochastic Fast and Slow Slow line rising, need both lines to thread higher
Bollinger Bands 16.99 and 15.67 Stabilising
Candlesticks Negative Close (Open 16.59 Close 16.55)
Trade Ideas On course after FOMC = Strength?

Silver continue to consolidate in the symmetrical triangle formation, posting lower high and higher low. Breakout in either direction is possible but need a solid price action to validate this. If Silver can trade and close above the 200 dma currently at 17.21 then it may stand a good chance to retest January high at 18.45. Only a decisive break and close above 17.00 and 17.45 will give bulls the confidence to retest higher.

On the other hand, a break below 15.50 will play the Short scenario with possible target of previous low and potentially much lower.

As long as it is still trading in the triangle, prices can whipsaw and only a clear breakout will dictate the next direction. Will we see a solid move in May? Bear in mind that last 2 years May 2013 and 2014 saw silver dipped lower before it resume higher in June!

Trading Instruments:  Platinum                                                                                  Trade Size: 2 contracts

Technical Indicator Reasoning
Support Zones 1086 and 1117 March low and April low
Resistance Zones 1184 and 1186.6 100 ma and 50% fib of January high
RSI Indicator 50.5 Breaking below 50?
Stochastic Fast and Slow Bearish Divergence  continues
Bollinger Bands 1177 and 1127 Stabilising
Candlesticks Negative close (Open 1154.2 Close 1150.5)
Trade Ideas Corrective rally – shorting opportunities?

Short initiated at 1162 with a stop at 1172 target the following area 1138 and 1128.

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 50% Fib retracement from January high 1186.60 then sellers have control. We continue to look for a corrective pullback higher and look to sell on rallies and only a break above 1186.6 will invalidate this stance.

Trading Instruments:  Palladium                                                                                Trade Size: 2 contracts

Technical Indicator Reasoning
Support Zones 746/754 and 761 Low hit at 752.50 (double bottom) and previous Fib is back in play
Resistance Zones 782/786.40 and 799.97 100 ma, previous high and 200 ma holding upside
RSI Indicator 55.94 Heading higher
Stochastic Fast and Slow Fast line above slow line
Bollinger Bands 787 and 749.76 Rising BB could indicate more upside?
Candlesticks Positive close (Open 774.5 Close 779.5)
Trade Ideas Ready to lift off?  200 ma in sight

Palladium has moved higher and took out the retest level we mentioned at 777. Now it needs to break and close above the 100 ma at 782 to give it more impetus to move higher. Key levels at 745 to 755 area is now strong support zone and only a break below that will give the sellers more control. Palladium could resume higher after it rebound off the 50% retracement high of 786.50. Next target for Palladium to conquer are top of the BB line 787 and the 200 ma at 799.97 followed by 846??

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. We are waiting for further confirmation on how Palladium will react.

Trade Palladium with care as this metal does not play by the rule.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s