Since the peak for bullion in August 2011, the metal has been under intense pressure and many gold s...
Gold Forming Symmetrical Triangle, Waiting for Breakout
07/28/2009 12:01 am EST
Gold prices appear to be forming a type of symmetrical triangle consolidation as seen in both the daily and weekly time frames as of July 26, 2009. Let’s take a look and note critical support and resistance levels.
All eyes of course are focused on the $1,000 per ounce level, as a breakout there would most likely lead to a large price run-up in gold. However, we’re not quite there yet.
The key levels to watch on a “wider” basis are the $1,000 level (critical resistance) and the $850 level, which also reflects Fibonacci support (not shown). A breakdown from $850 would lead to an almost certain retest of $700, but again, we’re not there yet.
For now, a symmetrical triangle consolidation pattern is forming, which currently compresses price between $910 and $960. The triangle is nearing completion, and perhaps the best play would be a clean break above the upper line to target a “magnet trade” to $1,000, or beneath the lower line also to target a magnet trade down to $850.
Until then, we are getting little guidance from the 20- or 50-day EMAs (in a consolidation phase, moving averages are virtually useless as support and resistance), so we focus on price highs and lows for clues.
By Corey Rosenbloom of AfraidToTrade.com
Related Articles on COMMODITIES
It is said that markets spend roughly 80% of their time trading in a range and 20% of the time redef...
There’s been plenty of action in the market lately, most of it of the negative variety. The S&...
Covered calls are possibly the best investment strategy on the planet. How many other strategies low...