I have a long bias on this precious metal. I have open positions @ 1305 and 1315. If this breaks below 1330 this week (break of IB), it may go down to base at 1299 - 1302 as the last kiss goodbye and fly off from there.
Trade with care
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Been getting a lot of private messages whether to short Gold. The idea is not to short Gold from this AB=CD model (at the start of the C Leg). Just like any harmonic patterns, confirm entries at the completion of pattern.
Gold is in a tight squeeze at the moment as highlighted in the grey box of the chart. It is also in a bull flag pattern. Breaks out north, will be a great rally and I will add upon confirmation on lower TF. Breaks down south, will be a slow movement.
PS. Still holding on to my 1305 and 1315 long positions - from previous published chart
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Previous trade idea
Dont short in a bull market
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Good to hedge? Broke 1330
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Great to hedge my longs - Bought Gold @ 1316.78
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Whilst hedging my long to protect my investments - Below is the chart to illustrate my trading plan.
More interested on the long side.
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IF price moves above 1330 - Will move my SL (Short) @ b/e
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Rejected 1330 - Closed below imaginary uptrend line - Heading towards base @ 1300 is a possibility
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1316.78 Long position closed at b/e
Will update trading plan
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liquidated all my longs. Holding my shorts.
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Apologise to those who wanted to short, but have warned them against in doing so. Gold was in a triangle and a day of rally can be fast and swift. Since I have 3 long positions, I had to hedge to minimise losses. Now Gold has broken 1300 with a "Big Shadow", would be hard to recover from here. All in all, profits are intact and closing this trade now @ 1271.61
Giao dịch được đóng thủ công
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Entries: Short positions x 2 @ 1336.74 Closed at 1271.61 (1352 pips total)
Long position @ 1330 stopped out @ 1310 (-197 pips) Long position @ 1315 stopped out @ 1310 (-49 pips) Long position @ 1305 stopped out @ 1289 (-159 pips)
947 pips in profit
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VirtualFax
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I'm now wondering whether there is still a case for Gold going lower or the bounce off the uptrend line was as low as it got. My gut tells me that there is still a chance for going lower; also, there is price action for one junior miner IVPAF, which seems to be a good early indicator of the Gold near term movements, even ahead of the other juniors. But other than the above ABCD pattern and a potential WW, I can't come up with something else that could supports Gold revisiting the $1,300-ish area. What do you think?
-Andrew-
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Anything is possible - but it bounced off the 1315 horizontal line and bounced off the uptrend trendline, Whilst I am hedging my longs I bought another position at 1316.78. I am monitoring DXY and it seems to be very weak atm
VirtualFax
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That's true. I personally believe the horizontal support level is rather secondary in this case but the price seems be very respective of the trendline.
-Andrew-
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Agreed - In that essence where the horizontal and trendline intersected and price bounced off in lower TF - I did a blind entry and bought another position @ Market. Gold Rally is fast and swift. 1 day of rally can wipe away many days of decline.
VirtualFax
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Your scenario implies Gold breaking down and staying below the uptrend line for a about a week before taking off. However, anything over two days will normally be signaling the overall uptrend reversal. Hence, the "flying off from there" might no longer be on the table at all anymore...
-Andrew-
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I usually go for strong horizontal levels, there are many instances whereby, trendlines are broken as a fakeout - Trendlines for me, only act as a guide as to where price may be heading.
VirtualFax
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Absolutely agree. But what becomes critical then is the period of time the price remains outside of the normal boundaries.
-Andrew-
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True
VirtualFax
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I know believe that there is a scenario in which your chart might be perfectly right. Though the price I'm getting at the point D on the very right is slightly lower than yours and is around $1,294-95
-Andrew-
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From swing high to low of AB - yes, Leg D falls within 1294-95, which is still categorically within a very strong horizontal support zone of 1295-1300 "Demand Zone". AB=CD are basically approximations, how accurate it falls down to doesn't matter, but PA is very important once it reaches the D leg and not to trade it blindly. The idea also is not to short from the C leg. I have a very long bias on Gold and still keeping my positions, it will range between 1331 and 1343 and I expect a breakout soon (either way)