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||1169/1173 and 1183||May low at 1169|
|Resistance Zones||1195/1190/1210 and 1221||20/50/100 and 200 DMA|
|RSI Indicator||46.87||Battling between 40 – 60 area|
|MACD||Lack of momentum – no trend|
|Bollinger Bands||1213 and 1177||Lower|
|Candlesticks||Positive Close (Open 1178.52 Close 1188.39)|
|Trade Ideas||Another test of 1150 -1160 level|
Afraid we do not see the current price action as anything but another range trading session which relies heavily on the next set of US economic data. As we are in the month of May, we prefer to see lower Gold prices before buying dips. Therefore, our short term argument is for another bout of fresh selling to test support around 1150 -1160 levels before mounting a reversal.
Watching the US dollar, it is on a corrective rally which could take the index back to retest 97.19 level (50% Fib from the daily chart which is also a retest on the neckline). We will not argue that the US dollar index continue might continue its bull run and lately, it has such a significance due to Federal Reserve intention to rate hike as early as June. However, the implication of a strong US dollar will give the Federal Reserve a lot of reason to control it.
Gold 4 hour chart price action suggests continuous range trading with a bias to the downside. 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.
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|
|RSI Indicator||51.49||Need to break out of the 40-60 range|
|Stochastic Fast and Slow||Slow line rising, need both lines to thread higher|
|Bollinger Bands||16.70 and 15.75||Contracting for a Breakout!|
|Candlesticks||Positive Close (Open 16.18 Close 16.45)|
|Trade Ideas||Range trading in a triangle|
No change on Silver commentary as it continues to range trade. Price action is lock between 15.80 and 16.60 and only a break out of the symmetrical triangle will set the next direction. Yesterday price action suggests a rejection at the high of 16.76 and has retraced lower. In the short time frame, Silver could retest lower numbers but support comes in at 15.75 – 16.00 levels (which is the lower trend line from the symmetrical triangle).
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! With that in mind, we could envisage a breakout from the triangle as we approach June (draw the triangle on the daily chart and you will see the confluence ends in June). Our bias view is to go long as we draw closer to June.
Trading Instruments: Platinum Trade Size: 2 contracts
|Support Zones||1086/1117 and 1122||March low/April low and May low|
|Resistance Zones||1162.91/1184 and 1186.6||38.2% fib, 100 ma and 50% fib of January high|
|RSI Indicator||48.77||Room to head lower for a bullish divergence setup|
|Stochastic Fast and Slow||Bearish Divergence continues|
|Bollinger Bands||1173 and 1122||Heading lower|
|Candlesticks||Positive close (Open 1128.4 Close 1147.1)|
|Trade Ideas||Corrective rally – shorting opportunities?|
Update on current Platinum open & close positions: Short initiated at 1162 with a stop at 1172 target the following area 1138 and 1128. Close 2 contracts for profit at 1138 and the other contract at 1128. We re-entered short as Platinum prices ran higher on a corrective pullback and short it at 1148.6 with 1 contract stop at 1162 target 1128 again. If Platinum moved higher again today, we look to add another short at 1153.3 levels with the same stop and target.
Take note that Platinum is also trading in a symmetrical triangle since it bottomed at 1086 and somehow, the confluence point of the triangle also ends as we approach the end of May. This clue may further reinforce our argument that a big breakout could happen in the metals sector.
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 798||100 ma, previous high and 200 ma holding upside|
|RSI Indicator||53.52||Bullish Divergence|
|Stochastic Fast and Slow||Fast line above slow line|
|Bollinger Bands||785.8 and 756.84||Contraction – Breakout looming?|
|Candlesticks||Positive close (Open 770.75 Close 782.8)|
|Trade Ideas||Continue to trend higher and found support|
Recent price action on Palladium has been positive as it trade well above the 20 dma as dips are bought but found sellers as it hit the 100 dma. We expect Palladium to continue in this stance but it will need to show its hand and determine a new direction. 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.
If Palladium breaks lower then we will look for key support levels at 745 to 755 which have proven to be strong support zone and only a break below 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.