Technical Analysis DayTradeIdeas
Technical Analysis DayTradeIdeas
Gold has collapsed significantly in each of the last 3 days.
The first collapse was followed by a very strong bounce to a new all time high.
The second bounce on the first of October retested that all time high.
I waited patiently for yesterday’s expected collapse to test strong support at 3835/31. Longs needed stops below 3823 & unfortunately we ran as far as 3819 before the recovery.
So far as I write over night we have only managed to recover about half of the loss but almost reached the 2 targets of 3850 & 3865.
As I said yesterday, I’m not going to be too optimistic with the targets and I will look for quicker profits than normal.
I don’t think we should hold onto positions too long with this increased volatility.
Just be aware that increased volatility is often apparent at market tops…. Although the period of volatility lasts a long time before markets turn around and go down.
Be prepared. This might just be the beginning of a volatile period and we may even see a reversal pattern form over the next few weeks or months.
I’m starting to be more concerned about a significant move to the downside, although I don’t think it will happen just yet.
I see strong support at 3835/31 again today. Longs need stops below 3820.
I’m going to take a break below 3820 as a sell signal today targeting 3805/00 for profit taking.
We should see buyers trying to pick a bottom as they have done in the last 3 sessions at strong support at 3796/3792.
Longs need stops below 3783.
As I write we are sitting in the middle of yesterday’s range, leading to a neutral doji on the daily chart, indicating the market may have run out of steam.It is possible we reverse from the 3860/3870 area we test the all time high at 3890/3895 it might be worth trying a short position with a stop above 3902.
Silver XAGUSD
Silver has now hit all 3 targets 4735/40, 4775/80 & 4800/4810.
Yesterday I warned: ”Be aware that the market is now severely overbought and further gains might be limited. A small correction to the downside could be expected with first support at 4630/20. Longs need stops below 4590.
This call could not have been more accurate!
We made a high for the day exactly at 4800/4810. (In fact it was right in the middle of the range at 4805).
Silver then immediately collapsed in a straight line (exactly as predicted in fact) to my support level at 4630/20.
Longs needed stops below 4590 & with a low of the day at 4588, the trade worked perfectly with an immediately 100 tick recovery.
Again yesterday I don’t think the analysis and predictions could have been more accurate!!
It’s important to note that we have a potential 1 week head and shoulders pattern forming.
Therefore I don’t trust the support at 4630/20 today and I will take a break below 4600 as a sell signal.
Shorting into a strong bull market goes against my rules, but with the bearish engulfing candle on the H4 chart & head & shoulders pattern I have good reason.
A break lower should target a buying opportunity at 4546/4536. (The bulls have not given up yet and will be looking for bargains today).Longs need stops below 4515.
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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.
Please email me if you need this report updated or Whatsapp: +66971910019 – To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk
Jason Sen, Director
https://www.daytradeideas.co.uk
20251003
