Technicals | Mar 09 2022
Bottom Line 08/03/22
Daily Trend: Up
Weekly Trend: Up
Monthly Trend: Up
Support Levels: $1840 / $1780 / $1754
Resistance Levels: $2151 (all-time highs) (April 22 contract)
[All prices Comex futures US$/oz]
Technical Discussion
Reasons to be bullish longer-term:
→ February 2022 breakout remains strong
→ bullish decade long cup and handle pattern well evolved on the longer-term charts
→ support zone circa $1680 continues to create strong demand
→ the bullish double bottom has triggered at $1929
In between reviews price action has finally broken out to the upside. It was a long wait ! Double three combinations look so complex on the surface that you can never be sure which way the dice is going to roll. On the flip side though, if you are experienced in reading these patterns, you soon understand that even though they make your head spin and fully test your patience, they are actually quite robust patterns. Especially if they complete as triangles which is how the Gold futures chart ended up playing out.
So we finally have the breakout of the Elliott symmetrical triangle, and the follow-through to this point in time has been strong. As part of the process, the medium-term double bottom pattern has also triggered circa $1929 with this pattern targeting the all-time highs and resistance aligned to $2151. We see no reason why this cannot be achieved.
The longer-term pattern though that we have been monitoring is the cup and handle proposition. It triggers above $2151 and has a solid projection attached to it up towards $3000. Likely to occur via a multi-year process. More immediately though we do have a negative lingering around which is the Type-A bearish divergence. It is quite strong which means a cooling-off breather could well be imminent shorter term. Longer-term though we continue to side with the Bulls.
Trading Strategy
We remain long at $1840 and have recently raised our stop to $1845 to lock in some small profits. Ideally, any upcoming breather will keep clear of our new stop position and set the scene for a higher swing low pattern to develop over the coming months. With any such trigger being the catalyst for a charge towards resistance and the all-time highs circa $2151. We will continue to monitor.
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