Technicals | Jul 20 2023
Bottom Line 18/07/23
Daily Trend: Up
Weekly Trend: Down
Monthly Trend: Up
Support Levels: $1900 / $1847 / $1787
Resistance Levels: $2000 (zone) / $2105.00 / $2177 – $2212 (all-time high) (August 2023 Comex contract)
All prices US$/oz
Technical Discussion
Reasons to be bullish longer-term:
→ Multi-year triple three-corrective pattern looks to have finally been completed back in November 2022
→ bullish decade-long cup and handle pattern now well evolved on the longer-term charts and in play
→ minor degree wave-(ii) depth is now under watch circa $1900 so needs to hold
The highest Open Interest (O.I) remains with the August 2023 contract so no price adjustments are needed on the chart since our last review. Although a rollover to the September 23 contract does look imminent. From a technical perspective, we are continuing to call for a low as having been locked in back in Oct/Nov last year which we have annotated as Wave-Z on our chart. With the low being locked in off the back of a complex triple three corrective phase that started back in mid-2020.
Complex corrective phases like this are very difficult to pin down a low point on, yet due to the pattern highlighted combined with timing aspects, the Wave-Z is high probability that a major low has locked in. Backed also by a solid month of price action attempting to break below this $1700.00-$1690.00 zone without success. So working off this probability our preferred stance on this now is that we have a Wave-1 and Wave-2 locked in as part of the reaction off these major lows, with a Wave-3 now in play and subdividing to the upside.
We talked in our video about the minor degree wave-(ii) subdivision traveling deeper than the 61.8% retracement zone which is not ideal. Yet if $1900.00 can continue to hold strong from here then we are going to be forgiving about the extra depth. Below $1900 though via a move that sticks will be very problematic in regards to our longer-term bullish interpretation of the trend being valid. So it is certainly a point worth noting. Price is presently overbought on the dailies yet oversold on the weeklies although there is presently no negative divergence hanging around to create any added concerns. Plus the 200-Day MA is continuing to act as dynamic support so this remains encouraging. My ideal scenario from here is for price to start kicking into gear north as part of a wave-(iii) of 3 which should be solidly impulsive with buyers back in control. I guess we wait and see!
Trading Strategy
We remain long at $1739.00 with our stop still sitting in some solid profits at $1827.00 I’ll be happy to move the stop higher to $1900.00 yet only after price breaks back above the $2000.00 zone via a move that sticks. Until then we will remain patient on the risk management side of things.
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