Trade view /
24 October 2017 at 7:56 GMT
I have seen a very interesting set up in gold this morning and with indices close to multi-year tops, this could reap high rewards.
First a look at the Dow Jones...
Monthly: I am not one to try and pick tops in the market but I would not be buying into indices at the moment. We have a multi-year 261.8% Fibonacci extension on the Dow at 23,396 (from 6,487-12,946). Further to this, DeMark has posted a 13 count (exhaustion) on the weekly chart!
Monthly: We can see a disjointed five-wave pattern from the $1,920/oz high trade in 2011. This should dictate that we are in the corrective sequence higher. An AB=CD formation takes gold to $1,451/oz. A reverse head-and-shoulders breakout and the measured move target is $1,695/oz. This is close to the 78.6% pullback level at $1,713 (bullish).
Weekly: We are in a bullish channel formation. Price action from the week of October 2 formed a bullish Morning Star. Although this pattern is stronger at the base of a trend, it does offer a positive bias. We also have a possible ascending triangle pattern (bullish).
Intraday (four-hours): Choppy price action for the last four days has formed a bullish Ending Wedge formation. Selling was posted in morning trade and there is scope for more losses. We look to buy close to the trend of lower lows and the 78.6% pullback level of $1,271/oz. The short-term target is the start of the wedge at $1,290/oz.
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Source: Saxo Bank
Entry: buying at $1,271/oz.
Targets: $1,290/oz (short-term), $1,451 and $1,713/oz (long-term).
— Edited by Michael McKenna
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