The Gold Report - 04 July 18

the gold report 2 

Gold has been forming an Ascending Triangle for the last 2.5 years. Finding resistance up around the $1,366 level, while forming higher bottoms along the way.

Most recently there has been a Double Top reversal pattern formed and confirmed setting up a downside target of $1,240. This week we have reached that target making a low at $1,238.40. We can find support once a target from a reversal pattern has been reached.

There is also a previous bottom formed back in December 2017 at $1,237.11 only $1.29 lower than the recent move down also looking like its acting as support.

There is an uptrend line from the bottom back in December 2015 ($1,047) which runs through the bottom in December 2016 ($1,124) which also happens to touch the most recent bottom, this week, at $1,238 which is another reason why we could be finding support around here. This is the bottom of the Ascending Triangle pattern.

Looking at the retracement from the range up from December 2015 bottom to the top of the triangle pattern the Fibonacci 38.2% level is $1,244.35. Then when we look at the range up from the December 2016 bottom to the top of the triangle pattern the 50% retracement level is $1,245.09. Both of these levels are marginally higher than the recent bottom this week and also look to be acting as potential support.

If Gold does find support around here then this could also be the second bottom in a Double Bottom (with the bottom formed back in December 2017). For this pattern to be confirmed we would need to break up above the Double Top and top of the Ascending Triangle pattern ($1,366) and in doing so sets up a target of $1,496. You can see this in the weekly chart of Gold below.

There are a number of ways to play this. You could buy some of the Australian Gold stocks which are already benefiting from a lower AUDUSD which gives you more bang for your buck. Alternately if you wanted a more direct relationship to Gold you could look at warrants on Gold. Either way I have a short list of stocks and warrants to consider.

Keep in mind that breaking below this $1,240ish area would be a sign of weakness and I would expect to see lower prices follow as this would be a failure of the Ascending Triangle pattern which would be Bearish for Gold. This is where you may consider having your stop loss and or going short to benefit from the expected move down.

If this is of interest to you please call or e mail me to discuss your options.

 

Gold – Weekly Chart

The Gold Report

 

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May the markets move the way you’re positioned.

 

Share Market Technical Analysis

 

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About Shane Langham

+61 (7) 3338 3838 Email Profile

Shane has passionately followed the markets since the age of 16, and has been an adviser in the financial markets since the year 2000 having worked for a range of firms, including one of the world’s largest investment banks as well as smaller boutique broking firms. Shane is also a past Vice President of the Australian Technical Analysts Association (ATAA) Brisbane, a position he held for 6 years.

Shane is currently a Senior Private Wealth Adviser at Phillip Capital and can assist you with all of your stock market needs - whether you are looking to buy or sell shares, set up a portfolio, grow your SMSF, protect your portfolio, or trade the market. He specialises in technical analysis, risk management, and options trading and focuses predominantly on the Aussie markets.

Shane also writes two key market related technical analysis reports (including a free weekly Market Commentary Report), designed to give traders and investors the best chance possible to get the results they are after from the markets. To find out more about these reports please click here. http://www.phillipcapital.com.au/shane-langham

Shane lives on the sunny Gold Coast with his wife and two dogs. He loves chatting about the market with other like-minded people, so don’t be afraid to pick up the phone or send him an email.

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