Technicals | Mar 08 2024
Bottom Line 07/03/24
Daily Trend: Up
Weekly Trend: Up
Monthly Trend: Up
Support Levels: US$2000 (psychological) / US$1862 / US$1750 (zone)
Resistance Levels: US$2172 / US$2257 / US$2328 (all-time high) (April 2024 contract)
Note: All prices US$/oz Comex futures
Technical Discussion
Reasons to remain neutral yet the Bulls may be starting to stir:
→ bullish decade-long cup and handle pattern may have finally been completed
→ The final handle aspect of the pattern has been 3 years in the making so the timing looks good for buyers to return
→ watching to see if psychological US$2000 can continue to hold things together
‘Larger patterns always require a lot of patience and this larger pattern in Gold is no different. As everyone knows from our previous reviews it is the larger bullish cup and handle formation that we are fingers crossed is going to breakout to the upside rather than failing to the downside. Yet being such a larger multi-year pattern, it is always very difficult to ascertain exactly when they are going to be ready to move.’
Difficult yes as stated above, yet when a number of technical aspects on any price chart start to spark, then the evidence starts to lean toward these larger patterns finally calling it a day. And as this is a bullish pattern we have been monitoring all these years, the expectation is that a powerful move north could well be getting ready to finally trigger here. We don’t wish to jump the gun, yet the last week or so of impulsive price action on above-average volume has created some recent excitement.
So the first stage of Cup and Handle patterns triggering involves price action breaking free of the handle aspect of the pattern. And this comes into play if price can start breaking well clear of the US$2170.00 zone. Last night price tagged an intraday high of US$2160.70 so we are very close. The second stage of course is when price breaks above the highs that formed the CUP, and this comes into play at the all-time high circa US$2328.00. So basically we have all the signs here now that the Bulls may finally be starting to stir.
Price is overbought on the dailies and bouncing off oversold on our weekly divergence indicator, yet the good news is there is no bearish divergence hanging around on either. Pretty much since October last year as well, the 200-Day MA has been doing a solid job acting as dynamic support with every attempt to break below it via a move that sticks failing. So the path of least resistance appears to be north, and as such it is now high probability that we witness further upside follow through from here. Watching!
Trading Strategy
We remain long at US$2039.80 yet with price action finally looking like it is ready to make a move, we have raised our stop into some small profits in between reviews circa US$2046.00. Is this finally the start of the bigger-picture bullish move we have been waiting for?
Re-published with permission of the publisher. www.thechartist.com.au All copyright remains with the publisher. The above views expressed are not by association FNArena's (see our disclaimer).
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