Tuesday, February 20, 2018

Gold and Silver charts: facing resistances after pullback rallies

Gold chart pattern


The daily bar chart pattern of Gold corrected below its 20 day and 50 day EMAs, but received good support from the 'support/resistance' zone between 1300 & 1310.

The overbought Slow stochastic indicator triggered a sharp pullback rally that touched a slightly lower top of 1364.40 on Fri. Feb 16. Formation of a long-legged doji candlestick pattern indicates hesitation among bulls and bears.

Gold's price appears to have formed a 'double top' reversal pattern inside the resistance zone between 1360 & 1380. The first technical confirmation of a 'double top' - lower volumes during formation of the second top - has been received.

The second technical confirmation - a fall below the 'valley' low of 1309 touched on Feb 8 - is awaited. (At the time of writing this post, gold's price has slipped down to 1340.)

Daily technical indicators are in bullish zones. MACD has crossed above its signal line. Slow stochastic has risen well inside its overbought zone. RSI is showing negative divergence by sliding down as gold's price rose higher on Feb 16.

Another fall towards the 'support/resistance' zone between 1300 & 1310 is possible. Gold's price is trading above its three EMAs in a bull market. Bulls are likely to 'buy the dip' again.

On longer term weekly chart (not shown), gold’s price closed above its three weekly EMAs in long-term bull territory, but may have formed a 'double top' reversal pattern.  Weekly technical indicators are in bullish zones, but not showing much upward momentum. Slow stochastic has dropped from its overbought zone. 

Silver chart pattern


The daily bar chart pattern of Silver corrected to an intra-day low of 16.13 on Feb 9. Overbought Slow stochastic and a small 'double bottom' reversal pattern on RSI led to a pullback rally.

The rally failed to overcome strong resistance from the 200 day EMA. Silver's price closed below its three EMAs in bear territory.

Daily technical indicators are looking neutral to bearish. MACD has moved up towards its signal line in bearish zone but has not been able to cross above it. RSI and Slow stochastic are facing resistances from their respective 50% levels.

Expect bears to 'sell on rise'. (At the time of writing this post, silver's price has slipped down to 16.44.)

On longer term weekly chart (not shown), silver’s price closed below its three weekly EMAs in a long-term bear marketWeekly technical indicators are in bearish zones. 

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