Technical Analysis DayTradeIdeas

Technical Analysis DayTradeIdeas

27 May

Gold unexpectedly collapsed – how low can Gold go this week? Where’s the buying opportunity??

Gold unexpectedly collapsed last week after making a new all time high. There was no indication from short term or the daily chart that the correction was about to occur & I do not believe it was all down to a stronger PMI number, when the dollar did not climb significantly against other currencies.

1. 1. As I warned, a close last week below the previous week’s low of 2332 leaves an important bearish engulfing candle on the weekly chart. (When a new all time high is reached & the price then collapses below the previous candle low, creating a bull trap, when longs are holding losing positions). Although we closed a point above 2332, it still qualifies as a bearish engulfing candle in my view. (See chart).
2. 2. Although I will not take this as an immediate sell signal, it is a warning to bulls that the bull run may be over at this stage. It could mean we consolidate in a sideways channel, it does not necessarily mean prices are about to collapse, although I would not be surprised to see us drift lower to 2310/00 at the start  of this week. I then need to see what pattern develops.
3. 3. Just 1 thing to note, I think last week’s high is too far above the April high for a double top pattern to be relevant. So it’s not as negative as it could have been.
4. 4. On Friday I thought we could see a recovery & I wrote: Gains could be limited, with nervous short term bulls trapped in some losses,  so a high for the day around 2350/55 is possible.
   However we only made it as far as 2347.

Silver  XAGUSD

1. 1.Silver collapsed through my buying opportunity at 3100/3080 with stops triggered below 3050.
   The break lower signalled a slide as far as a buying opportunity at 3010/3000.
   This target was quickly achieved with a low for the day exactly here.
   Longs need stops below 2970.
2. 2. Targets for our longs are 3055/60 & even 3095/99 is possible.

3. However a break below 2970 is a sell signal for today, targeting 2930/25, perhaps as far as strong support at 2900/2890.

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Daily Technical Analysis is provided by Jason Sen of Day Trade Ideas, who has been day trading since the late 1980’s. Jason has been a contributor of Traders Summit since the beginning. He primarily focuses on providing technical analysis of the financial markets, including stock chart patterns, Forex and Metals setups, and other useful technical analysis.

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20240527