Gold Daily Chart Breaks Below Trend Line
07/28/2010 12:01 am EST
Price action on gold (a daily chart of which is shown) as of Tuesday (July 27) has just tentatively broken down below a long-term uptrend support line that extends at least all the way back to the October 2008 low.
(Price on first pane, Slow Stochastics on second pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)
This breakdown is significant because the broken trend line has accurately defined the bullish trend in gold for at least the past 21 months. The current trend line breakdown occurs after price hovered for about a week above the trend line.
Currently, an immediate downside support target on this breakdown resides in the 1160 price region. In the event of further bearish momentum on this breakdown, a further downside target resides in the 1145 price region.By James Chen, chief technical strategist, FXSolutions.com