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Technical Precious Metals
Written by article default Tuesday, 19 April 2011 11:52
GoldMidday Report
The metal fluctuates aggressively, recoding a new high for the series of all-time highs that dominated the movements since beginning of this millennium. The bearish harmonic AB=CD pattern is still forming the CD leg and thus, the positivity continued as the metal is moving ideally according to the technical analysis rules. Now, we are very close to 1500.00 zones, which was awaited after breaching 1400.00 areas, while the potential PRZ of our pattern represented by 1508.00. Stochastic is trending downwards due to the conflict between ask and demand powers, which might be neglected due to stability above 161.8% seen above. Hence, we still see chances for resuming the upside rally towards 1500.00 or 1523.00. Stochastic's negative sign could be ignored with the stability above 1468.00 over intraday basis, preferably above 1474.00 otherwise a correctional wave could be seen due to the overbought sign on momentum indicators.
The trading range for today is among the key support at 1449.00 and key resistance now at 1523.00.
The general trend over the short term basis is to the downside targeting 1208.00 per ounce as far as areas of 1508.00 remain intact.
| Support | 1485.00 | 1480.00 | 1474.00 | 1468.00 | 1462.00 |
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| Resistance | 1495.00 | 1500.00 | 1508.00 | 1523.00 | 1540.00 |
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| Recommendation | Based on the charts and explanations above our opinion is, buying gold around 1485.00 gradually targeting 1500.00 followed by 1523.00 and stop loss with a daily closing below 1468.00 might be appropriate. | ||||
Silver
Midday Report
Silver is still trading within the same range since yesterday. The IM wave that started from 33.55 needs more confirmations but Stochastic is definitely negative and that might confirm the suggested Elliott count. Additionally, the solidity of the resistance of the bullish channel is another reason to propose a downside move. In fact, stability below 43.35 might support the proposed negative wave since this level is connected to the fourth wave and also connected to the IM wave, representing 161.8% of the entire wave. The most important thing is stability below 44.10 over intraday basis to keep the scenario valid. Assessing indicators, ADX as a representative of trend indicators shows signs of bullish trend weakness although D+ is still moving above D- but the indicator moved from 58.00 to 30.00 levels. A break of the aforesaid level will add further confirmation that the bearish trend will continue, while a break of 42.50 with a four hour closing below it will be the key for opening the door towards the major support level of the ascending channel at $41.35 per ounce.
The trading range for today is among the key support at 40.20 and key resistance now at 44.63.
The general trend over short term basis is neutral until we see how the metal will behave around 42.05-42.30 zones during this week.
| Support | 43.00 | 42.65 | 42.50 | 42.05 | 41.80 |
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| Resistance | 43.35 | 43.50 | 43.68 | 44.10 | 44.63 |
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| Recommendation | Our morning expectations remain valid. | ||||