Where are the Bargain Hunters? Daily View 27th May

Bullion Daily

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

With the lack of US related data today, traders could see more price action on Thursday and Friday with the release of US Pending home sales data but most importantly the US GDP (Q1). Other data include US Core personal consumption and Chicago PMI which will give traders food for thought. As mentioned in yesterday’s commentary – “Once again gold failed to find any decent support and a move lower now to 1191 -1193 levels is possible today. Should selling escalate, we will look for 1184 as last line of support to go long. Dips are still buying opportunity in the short to medium term as long as gold is trading above 1178.” However, we will not rule out the possibility to break below 1178 with BB line at 1170 as support.

Keep a close eye on the daily RSI that has been range trading since April 2015. A bounced from its current low could allow bargain hunters to buy into dips and a grind higher could happen. Next movement in gold is very much data and dollar dependant. We continue to build long between 1185 – 1195 levels with a tight stop.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance Levels:

  • Previous high at 1232.31
  • DMAs 200 at 1214.7 / 100 at 1212.417 / 50 at 1197.74 and 20 at 1200.33
  • 13th May low at 1191.17

Daily Support Levels:

  • Fib level at 1184.15
  • 11th May 1178.78

Afraid there is not much to add on the following update but in the short term, we continue to see lower prices and Silver need to find support as mentioned in previous commentary (see below).

A break lower will find support at the following key levels 16.40 -16.60 which is a potential fertile area for longs to build on. On the daily, those levels hold the 50% and 61.8% Fib retracement area which should provide decent support. This also coincides with the rising orange channel line that should keep the run higher intact for now. Note the red AB – CD line could play out in the short medium time frame.

To highlight the downside risk, a break below 16.08 will spell big trouble for Silver as it opens up the possibility to retest 15.85 levels.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance Levels:

  • Previous daily high at 17.75
  • Psychological level at 18.00
  • Downtrend line that coincide with 18.00
  • 200 ma at 16.93

Daily Support Levels:

  • Several key DMA levels 100 at 16.67 / 20 at 16.78
  • Fib retracement level 50% at 16.66 and 38.2% at 16.40

Are we close to one more low before a meaningful reversal? The current setup seems possible with a great risk reward as long as 1117 holds. Buyers need to flock in to snap up platinum at a possible bargain price this week in order to maintain our semi-bullish outlook to test 1165 – 1170 levels again. We maintain a semi-bullish outlook and would still prefer to build long around the key support areas with tight stop.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance levels:

  • Previous daily high at 1177.1
  • 100 dma at 1174.79 / 50 at 1145.6 and 20 at 1145.64

Daily Support levels:

  • May low at 1121.1
  • April low at 1117
  • March low 1113.7

A bearish engulfing candle from yesterday could well suggest further downside is in store. Palladium continues to trade with lower high and lower low ever since the start of May. We will stick with our previous outlook and could well add to our short positions at 786 – 791 levels. Palladium bull has certainly showed exhaustion and we are very much veered to a bearish stance. A small short position has been initiated at 780 with stops at 793.5 to target 762 and 755 support zones.

Only a break above 801 will give the bulls the confidence to test higher prices. Current price action is dominated by sellers.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance levels:

  • Previous daily high at 801.6 and 797.6
  • 200 dma at 793.96 / 100 at 779.84 / 20 at 782.74
  • Downtrend line (see the shaded brown zone)

Daily Support levels:

  • DMAs 50 at 771.35
  • Fib retracement levels 38.2% at 771.5 / 50% at 762.3
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