Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

Gold – Sell Signal on 5EMA High-Low Charts with Double Top

54 sec read

Gold CMP : $1860/Ounce


 
The trend of gold is tremendous, since july 2011 gold has gained nearly $400/ounce and the raise in gold due to poor global macro economic conditions.Gold is resisting to close above $1900 levels on EOD basis. As bulls could not manage to hold the $1900 level yet again – this time forming a bearish double top pattern in the process. Gold EMA charts are shown along with 5EMA High-Low Buy or Sell indicator. There is a recent sell signal on 7th September 2011 warning medium term trend reversal.

ACTION ITEMS:

Bullish:
Investors who believe that gold still has room to the upside might want to consider the following trades:

Manage your risk. There is no doubt that gold has rewarded investors will great returns, however, no one ever went broke taking a profit. Taking a bit off of the table at current levels to lock in gains is a prudent idea. Should gold break above $1876(i.e Breaking above 5EMA) again on EOD basis, that would be a great time to reenter, as a push to $2000 would appear likely.

Bearish:

Investors who believe that today’s action is a precursor to a large downside move in gold prices may consider these alternate positions:

At such high levels, the risk has transferred squarely to the bulls. Getting short a large position here with a minimum target price of $1700 leves with $1900 as EOD stop loss and a stop out above the all time high of $1923.70 provides for a fantastic risk/reward ratio.

Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

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