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Technical Precious Metals
Written by article default Wednesday, 13 July 2011 08:04
Morning Report
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Stability above 1558.00 has completely damaged the harmonic 5-0 pattern discussed yesterday. Although, it is a bullish pattern but we should witness a downside correction before moving higher. After this failure, we will look at the ascending channel that dominated the movements from 1477.00 zones to present levels. This bullish channel has support line meeting SMA 20 as seen on the graph. But, momentum indicators are showing clear overbought signs and that may cause a correction downside wave. Stability above 1550.00-1562.00 makes the bullishness valid; whilst a break of 1548.00 may damage the bullish wave temporarily.
The trading range for today is among the key support at 1538.00 and key resistance now at 1608.00.
The general trend over the short term basis is to the upside targeting 1600.00 per ounce as far as areas of 1430.00 remain intact with weekly closing.
| Support | 1562.00 | 1558.00 | 1550.00 | 1548.00 | 1540.00 |
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| Resistance | 1575.00 | 1580.00 | 1585.00 | 1600.00 | 1607.00 |
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| Recommendation | Based on the charts and explanations above our opinion is, buying gold around 1558.00 gradually targeting 1575.00, 1585 and 1600.00, while the stop loss is a four hour closing below 1545.00 might be appropriate. | ||||
Silver
Morning Report
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We have discussed in our previous report that 34.76 level would define the next move and we see how the bearish effect of the harmonic pattern has been limited around it where the second technical objective of the pattern exists. From those levels, the metal bounced after achieving a huge part of this week's expectations. This bounce occurred after retesting the previous broken resistance for the downside channel -turned into support-. The metal stabilized once again above 36.35 which may confirm a bullish wave, but Stochastic reflects overbought case attempting to move downwards. Since the price is below the 36.35 and above 35.60, we will be neutral during the morning session until we make sure that the harmonic structure's effect is over.
The trading range for today is among the key support at 34.35 and key resistance now at 38.00.
The general trend over short term basis is to the downside, targeting 26.65 as far as areas of 48.50 remain intact with weekly closing.
| Support | 36.00 | 35.76 | 35.60 | 35.00 | 34.76 |
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| Resistance | 36.35 | 36.75 | 37.00 | 37.45 | 37.85 |
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| Recommendation | Based on the charts and explanations above our opinion is, staying aside until a clearer sign appears to pinpoint the upcoming big move. | ||||
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