GOLD ($) – Pullback mode
By Technical Analyst Colin Abrams
Recommendation: BUY LOWER DOWN (AGGRESSIVE SELL SHORT)
Current Trend: Short-term up but overbought. Med-term sideways.
Strategy: Look to buy closer to $1235.
- The gold price after a good rally, has closed below line 4 and this should begin a short-term correction.
- Its short-term Stochastic is overbought and giving a negative divergence, warning of the correction to come, which is now underway.
- Traders look to buy gold lower down e.g. closer to $1235, or even slightly lower. (I like to see a bullish reversal day/candle up to trigger the entry).
- However, aggressive traders can sell it short at current levels. (Start taking profits from $1240-$1235. Stop-loss a close above $1274, then use a breaking of its prior one day high from $1242).
- The target for a new rally after the sell-off, will be up to line 2 at $1295, and it might even break above it.
- Stop-loss is a close below $1225. Once it clears last weeks high (1274) raise it to your entry point. And from 1286 raise it again to a breaking of its prior one day low.
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