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Tuesday, April 21, 2015

Gold and Silver charts: an update

Gold Chart Pattern

GOLD_Apr2015

The bear market rally on the daily bar chart pattern of gold appears to have ended. In the previous post, the possibility of an upward break out from an ‘inverse head and shoulders’ pattern (with a neckline at 1220) was mentioned. But it turned out to be a case of pattern failure.

Gold’s price had made one abortive attempt to break out above the neckline at 1220. It subsequently dropped into a consolidation range between 1180 and 1210. It closed just below the 20 day EMA, and is trading well below its falling 200 day EMA in a bear market.

Technical indicators are turning bearish. MACD is moving sideways just above the ‘0’ line. RSI has slipped below its 50% level. Slow stochastic formed a ‘double top’ reversal pattern and dropped below its 50% level.

Strong volumes on recent down-days indicate that bears are beginning to regain control.

On longer term weekly chart (not shown), gold’s price faced resistance from its 20 week EMA, and is trading below its three weekly EMAs in a long-term bear market. Technical indicators are in bearish zones, and showing signs of downward momentum.

Silver Chart Pattern

SILVER_Apr2015

The daily bar chart pattern of silver failed to sustain above the 17 level. Bear selling dropped silver’s price below its 20 day and 50 day EMAs, and the 16 level. The brief bear market rally during Mar ‘15 is over.

Daily technical indicators are in bearish zones. MACD is falling below its signal line in negative territory. RSI is below its 50% level and showing downward momentum. Slow stochastic has re-entered its oversold zone.

Strong volumes on down-days is a sign of bear dominance. Silver’s price may again test support from the zone between 15 and 15.50.

On longer term weekly chart (not shown), silver’s price closed well below its three weekly EMAs in a long-term bear market. Technical indicators are in bearish zones, and showing strong downward momentum.

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