I’m bullish on gold futures. Today it made new highs for this rally; I thought I’d write a quick update on it.
The daily chart for December gold futures is below. After I wrote about it last Thursday (see here) it had a breakout setup on Friday, as Friday had the narrowest trading range of the previous seven sessions and was a doji bar. It was interesting that it consolidated around the 1215 area on Friday; that is a 50 percent retracement of the selloff from the late June high. I’ve always viewed 50 percent retracement levels as the most significant of the Fibonacci retracements, as they are the dividing line between a correction and a definitive trend change.
More upside ahead?
Today’s breakout rally popped over Friday’s high at 1219.80 and the July 14 high at 1222.10 that I labeled as the next resistance point. After today’s breakout rally I would anticipate a correction and / or a consolidation day tomorrow. Traders looking to get long could consider buying a pullback to the $1222 to $1220 area; holding that level could serve as a springboard to the next leg up. For now I’d consider trailing stops on long positions (for longer term traders) rather than picking an objective. It’s hard to find any objectives below the late June high at $1270.
This is a sample of the analysis from my Swing Trader’s Insight advisory service. For information on STI, and to sign up for a free two week trial, visit here.
The information contained here includes information from sources believed to be reliable and accurate, but no guarantee is made as to accuracy, nor do they purport to be complete. Opinions are subject to change without notice. Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
