Trade of the Week – GOLD

DON’T FIGHT THE TAPE – READ THE TAPE

Trade of the Week – GOLD

Reading the tape (THE PRICE ACTION) is one of the most important tools in anticipating future movement in the markets. The concepts behind setting up Support & Resistance lines is for the purpose of giving a trader the potential pivot points to where a symbol can either bounce off or break through.

These beacons as they are called, are fundamental to trading technical analysis.

In the case of GOLD this past week, we saw SUPPORT breached at $1,345. This point was previously a RESISTANCE level that was challenged multiple times.

However, within the range of $1,305-$1,360 (a great trading range to be trading in), it broke on the upside with some momentum. This was short lived and created a V formation to the downside.

Once the Break at $1,345 was breached this created a GREAT short-term trading opportunity. The selloff continued until $1,320 within one day of trading.

Keep in mind that a trader needs to do their work in order to take advantage of these types of trading opportunities. They come often enough on multiple time frames that make it easier to anticipate.

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