Trade view /
16 June 2016 at 9:09 GMT
On June 6, I offered a trade idea
to buy gold via the popular GLD etf. Gold has since rallied nicely and on Wednesday reached the upper end of my price target. So, it is time to take profits and wait for the next trade setup.
On the multi-year weekly chart, we see that the GLD etf as a result of Wednesday's post FOMC rally bumped into its 2011 diagonal resistance line. While I ultimately think this line of resistance will be broken and gold rallies plenty further, for the time being and honouring my initial price/profit targets laid out on June 6 for this trade, I am taking full profits in my long GLD trade.
Source: Saxo Bank
On the daily chart we see that the GLD despite its recent sharp rally off the lower end of the multi-month trading range does still remain in this range. Again, a breakout could occur any day now but for me to jump on a breakout I would need it to take place after some better consolidation.
Chasing this potential breakout higher at this juncture after an already steep multi-day run smells of low probability to me. So, I am taking profits in a nice trade that has reached my profit target near $124 and am ready to look for new trading opportunities.
— Edited by Martin O'Rourke
Non-independent investment research disclaimer applies. Read more