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||Taken out previous 1193 and 1183 – 1173 next?|
|Resistance Zones||1211 and 1222||Need to close above 100 ma and 200 ma|
|RSI Indicator||44.22||Battling between 40 – 60 area|
|MACD||Lack of momentum – no trend|
|Bollinger Bands||1217 and 1179||Expanded which may suggest directional play|
|Candlesticks||Negative Close (Open 1204.61 Close 1184.58)|
|Trade Ideas||Target 200 ma at 1223.45|
Further whipsaw price action and moving the goal post is what gold has been doing. Fights between bulls and bears or algos controlling the market – whichever comes first, the price action is not one that trends. We remain in this tight range trading and a symmetrical triangle formation. Asking which direction gold will go next (we are a biased Bear). The “tried” solution is to get a coin and flip to your heart desire.
With Europe close, expect a rather quiet market but activity should start to pick up once the US open with more economic data. The US dollar has caught some bid and with better data, it should go higher or move in a corrective rally. Should gold trade below 1175 then expect another wave of selling as it trade out of the triangle. At the moment, we may continue to see range trading but will not discount the fact that this week selling has left a gravestone doji on the weekly chart. Such candlestick often refers to the lack of strength by the buyers and sellers dominate in the market with the expectation of lower prices in the near future. Due to the nature of recent price action (which is heavily data dependent), we are not banking on the fact that it will happen – but we prefer to remain cautious.
Only a clean break and close above 1224 will allow the bulls to charge higher. Lest not forget, gold is still in a major bear market and short term rallies are selling opportunity (applies to XAUUSD).
Trading Instruments: Silver Trade Size: 2 contracts
|Technical Indicator||Daily Chart||Reasoning|
|Support Zones||15.59 and 15.80||Feeble support zones in this whipsaw action|
|Resistance Zones||16.88/17.00 and 17.21||50 % Fib, then the psychological level then the 200 ma|
|Stochastic Fast and Slow||Slow line rising, need both lines to thread higher|
|Bollinger Bands||16.89 and 15.66||Heading lower = bearish?|
|Candlesticks||Negative Close (Open 16.55 Close 16.11)|
|Trade Ideas||Failed to sustain gain|
Outlook on gold in the short term is clear that we will get lower high and higher low. Trading range is lock between 15.80 and 16.60 and only a break out of the symmetrical triangle will set the next direction.
Probable downside scenario if we see a clean break below 15.50 that has the potential move of at least 300 points (measuring it from the height of the triangle). Approximately, that will give us 12.30 to 12.50 levels which were last seen on April 2009. Looking at the monthly chart, November 2008 price action was the start of the Bull Run which was confirmed by dip buying in March – April 2009 period.
We continue to remind readers that Silver too is in a bear market and the amazing Bull Run is unwinding 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
|Support Zones||1086 and 1117||March low and April low|
|Resistance Zones||1162.91/1184 and 1186.6||38.2% fib, 100 ma and 50% fib of January high|
|RSI Indicator||47.63||Room to head lower for a bullish divergence setup|
|Stochastic Fast and Slow||Bearish Divergence continues|
|Bollinger Bands||1177 and 1125||Stabilising|
|Candlesticks||Negative close (Open 1151.1 Close 1140.80)|
|Trade Ideas||Corrective rally – shorting opportunities?|
Short initiated at 1162 with a stop at 1172 target the following area 1138 and 1128. Close 1 contract for a profit at 1138 raise stop to breakeven and looking to re-short if corrective price action takes it to 1148 – 1152 area.
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
|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||54.51||Need higher than 60 to indicate bullish play|
|Stochastic Fast and Slow||Fast line above slow line|
|Bollinger Bands||784 and 756.63||Contraction – Breakout looming?|
|Candlesticks||Negative close (Open 779.5 Close 775.5)|
|Trade Ideas||Ready to lift off? 200 ma in sight then IHS in play?|
Take note that Palladium Bollinger Band is closing in for a potential breakout. We will not rule out that it could go higher once it can overcome the big resistance wall of 785 – 790 levels. Therefore, the IHS could be in play. Should this take effect, we envisage a target of 840 -850 levels.
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.