During a holiday-shortened trading week, FIIs were net sellers of equity on all four days. Their total net selling was worth Rs 52.7 Billion. DIIs were net buyers of equity on all four trading days. Their total net buying was worth Rs 44.6 Billion, as per provisional figures.
The market started a pullback rally from Wed. Sep 4 expecting announcement of a third set of measures for boosting India's sagging economy. Instead, the Finance Minister promised to consider more measures after consultations.
After strong rallies, prices of gold and silver corrected sharply during Thu. and Fri. (Sep 5 and 6). With global stock markets on recovery paths, some more near-term downside in precious metals is possible.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex dropped sharply and lost 770 points on Tue. Sep 3 due to heavy selling by FIIs after the long week end. There was some recovery during the rest of the week, but the index closed below its three EMAs inside the 'support zone' (between 35900 and 37100).
Daily technical indicators are looking neutral to mildly bullish. MACD has merged with its rising signal line in bearish zone. ROC has crossed above its 10 day MA to enter bullish zone. RSI and Slow stochastic are just below their respective 50% levels.
The market was hoping for a third economic booster 'package' on Fri. Sep 6, but all it got was a promise. It won't be surprising if FIIs continue to vote with their feet. When an economy is steadily going downhill, throwing a few 'packages' in its path won't stop the slide. The gradient of the road itself needs to be changed.
That means bold reforms and immediate actions. The time for consultation and consideration is long over. More and more companies are laying-off employees and reducing production - making the economy decelerate even more. It is going to be a long and difficult road ahead.
Small investors should concentrate on protecting capital - whatever may be left of it. Ignore the exhortations of those experts who want you to buy now.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty tested the lower edge of the 'support zone' (between 10700 and 11100) intra-week before bouncing up to close just below 10950.
The index has been consolidating inside the 'support zone' for the past six weeks, and is trading below its 20 week and 50 week EMAs.
Weekly technical indicators are looking bearish and oversold. MACD is falling below its signal line in bearish zone. ROC and RSI are falling inside their respective oversold zones. Slow stochastic is moving sideways along the edge of its oversold zone. Expect some more consolidation or correction.
Nifty's TTM P/E has moved down to 26.91 - which remains above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) has fallen sharply inside its oversold zone. Further index upside may be limited.
Bottomline? Sensex and Nifty charts are consolidating within long-term support zones. A low Q1 (Jun '19) GDP figure and the ongoing US-China trade spat have dampened bullish sentiment. Small investors should stay on the sidelines, but continue with their SIPs.
Gold chart pattern
The daily bar chart pattern of Gold shows three clearly identifiable consolidation patterns - a 'falling wedge', a 'rectangle' and a 'symmetrical triangle'. All three patterns formed after the 'golden cross' of the 50 day EMA above the 200 day EMA technically confirmed a bull market.
After breaking out above the 'symmetrical triangle' on Wed. Jul 17, gold's price touched a 52 week high of 1454 on Thu. Jul 18. Note that all three technical indicators showed negative divergences by touching lower tops, which triggered a pullback to the top of the 'triangle'.
Daily technical indicators are in bullish zones after correcting overbought conditions, but are not showing much upward momentum. MACD is moving sideways below its falling signal line. RSI is hovering just below its overbought zone. Slow stochastic has bounced up after slipping below its 50% level.
The US Dollar index has been consolidating sideways between 96.40 and 97.20 since Jul 5. Gold's price consolidated sideways in tandem. After touching a low of 96.40 on Jul 19, the Dollar index has been climbing towards 97.20.
On longer term weekly chart (not shown), gold’s price closed well above its three rising weekly EMAs in long-term bull territory. Weekly technical indicators are inside their respective overbought zones. Some price correction or consolidation may follow.
Silver chart pattern
The daily bar chart pattern of Silver consolidated within a bullish 'flag' pattern from which an upward breakout occurred on Mon. Jul 15. Rising volumes propelled silver's price to a 52 week high of 16.62 on Fri. Jul 19 before profit booking caused a fall just below 16.20.
Silver's price has since bounced up to close just above 16.40, and well above its three EMAs in bull territory. The 'golden cross' of the 50 day EMA above the 200 day EMA has technically confirmed a return to a bull market.
Daily technical indicators are looking bullish and overbought. MACD and RSI are rising inside their respective overbought zones. Slow stochastic is correcting inside its overbought zone - hinting at some near-term price consolidation or correction.
On longer term weekly chart (not shown), silver's price tested resistance from its 200 week EMA, and closed well above its 20 week and 50 week EMAs in a long-term bear market. Weekly technical indicators are looking bullish and showing upward momentum.
Gold chart pattern
The following comments appeared in the previous post on the daily bar chart pattern of Gold: "...the rally has been a bit too steep. Some profit booking is likely to emerge soon."
After a sharp upward breakout with good volume support above a 'Cup and Handle' pattern, gold's price twice tested the 1440 level - forming a small 'double top' reversal pattern.
A pullback towards the rising 20 day EMA and some sideways consolidation followed. Gold's price is trading above its three rising EMAs in a bull market.
Daily technical indicators are correcting overbought conditions. MACD has crossed below its signal line inside its overbought zone. RSI has fallen from its overbought zone. Slow stochastic formed a 'double top' pattern before dropping from its overbought zone.
The US Dollar index dropped to a low of 95.36 on Jun 25, triggering the sharp rally in Gold's price. Since then, the Dollar Index has recovered smartly past 97 - keeping a lid on further upside in price.
On longer term weekly chart (not shown), gold’s price closed well above its three rising weekly EMAs in long-term bull territory. Weekly technical indicators are beginning to correct overbought conditions. Some more price consolidation or correction can follow.
Silver chart pattern
The following comments appeared in the previous post on the daily bar chart pattern of Silver: "Slow stochastic is consolidating at the edge of its overbought zone. Some price consolidation/correction can be expected."
Silver's price consolidated sideways above its 200 day EMA before forming a small 'double top' reversal pattern and corrected down to its 50 day EMA.
Daily technical indicators are turning bearish. MACD formed a small bearish 'rounding top' pattern and crossed below its signal line. RSI has dropped to seek support from its 50% level. Slow stochastic has slipped below its 50% level. Some more price correction or consolidation is likely.
On longer term weekly chart (not shown), silver's price closed at its 20 week EMA, but below its 50 week EMA and well below its sliding 200 week EMA in a long-term bear market. Weekly technical indicators are looking bullish to neutral, but not showing any upward momentum.
Gold chart pattern
The following remark was made in the previous post on the daily bar chart pattern of Gold: "Gold's price may consolidate or correct towards 1310-1320 zone before it can resume its up move."
On Jun 11, gold's price touched a low of 1319, but formed a 'reversal day' bar (lower low, higher close) that led to a strong rally. After a brief hesitation around 1345 - which happens to be the level of the 'rim' of the 'cup and handle' pattern - gold's price shot up like a rocket past 1400.
Daily technical indicators are looking quite overbought. MACD has risen sharply inside its overbought zone. RSI is rising inside its overbought zone. Slow stochastic is also rising inside its overbought zone, but showing negative divergence by touching a lower top.
Gold's price is trading well above its three rising EMAs in a bull market. However, the rally has been a bit too steep. Some profit booking is likely to emerge soon.
The US Dollar index dropped vertically below 95.50 on Jun 24, triggering the sharp rally in Gold's price. The price break out above the 'rim' (1345) has technically confirmed the 'cup and handle' pattern - with an upward target above 1500.
On longer term weekly chart (not shown), gold’s price closed well above its three weekly EMAs in long-term bull territory. Weekly technical indicators are looking bullish and overbought. Some price correction/consolidation may follow.
Silver chart pattern
The daily bar chart pattern of Silver had been struggling to overcome resistance from its 200 day EMA after breaking out above the (purple) down trend line. Finally, on Thu. Jun 20, silver's price did break out above its 200 day EMA into bull territory.
As often happens after a breakout, a pullback down to the 200 day EMA followed on Fri. Jun 21. Silver's price then bounced up to close near 15.40 - giving some relief to bulls.
Daily technical indicators are in bullish zones. MACD is rising above its signal line. RSI has slipped down after facing resistance from the edge of its overbought zone. Slow stochastic is consolidating at the edge of its overbought zone. Some price consolidation/correction can be expected.
On longer term weekly chart (not shown), silver's price closed above its 20 week and 50 week EMAs, but well below its sliding 200 week EMA in a long-term bear market. Weekly technical indicators are turning bullish.
Gold chart pattern
Note the following comments made in the previous post on the daily bar chart pattern of Gold: "Recent volume spikes on up days indicate buying interest...Gold's price may make another attempt to break out above the 'wedge'."
This time, the breakout above the 'falling wedge' (which is also the 'handle' of a large 'cup and handle' pattern) was successful. Gold's price shot up like a rocket to test its previous (Feb '19) top of 1350, but profit booking dropped it to a close below 1330.
Daily technical indicators are looking overbought. MACD has risen sharply to enter its overbought zone. RSI has fallen from its overbought zone. Slow stochastic is sliding down inside its overbought zone. Gold's price may consolidate or correct towards 1310-1320 zone before it can resume its up move.
After touching a high of 98.26 on May 23 - its highest level in 2 years - the US Dollar index dropped to a low of 96.40 on Jun 7 before recovering to 96.70. The fall may have triggered the upward breakout in Gold's price.
On longer term weekly chart (not shown), gold’s price closed well above its three weekly EMAs in long-term bull territory. Weekly technical indicators are in bullish zones. MACD and Slow stochastic are showing upward momentum. RSI is showing downward momentum - hinting at some price consolidation.
Silver chart pattern
After spending three months below the (purple) down trend line, the daily bar chart pattern of Silver managed to breakout above the down trend line and its 20 day and 50 day EMAs, with strong volume support.
However, resistance from the sliding 200 day EMA proved to be too strong. Bullish hopes took a sever knock as silver's price dropped sharply below its 20 day and 50 day EMAs to close in bear territory.
Daily technical indicators are turning bearish. MACD is facing resistance from its '0' line. RSI has dropped below its 50% level. Slow stochastic has turned down after facing resistance from the edge of its overbought zone.
On longer term weekly chart (not shown), silver's price is trading below its three sliding weekly EMAs in a long-term bear market. Weekly technical indicators are in bearish zones and not showing much upward momentum. Some more correction or consolidation is likely.
Gold chart pattern
The following remark appeared in the previous post on the daily bar chart pattern of Gold: "Slow stochastic has entered its overbought zone, and can trigger a pullback towards the top of the 'wedge'."
The expected pullback turned into a correction. Gold's price dropped back inside the 'falling wedge' (which is the 'handle' of a large 'cup and handle') pattern, and fell below its three EMAs into bear territory.
After touching a low of 1269 on May 21, Gold's price bounced up to close above its 200 day EMA - keeping bullish hopes alive. Recent volume spikes on up days indicate buying interest.
Daily technical indicators are looking neutral to bearish. MACD is facing resistance from its signal line in bearish zone. RSI is facing resistance from its 50% level. Slow stochastic has bounced up from the edge of its oversold zone. Gold's price may make another attempt to break out above the 'wedge'.
After touching a high of 98.26 on May 23 - its highest level in 2 years - the US Dollar index dropped to a low 97.40 on May 24, limiting the upside on Gold's price.
On longer term weekly chart (not shown), gold’s price bounced up after receiving support from its 200 week EMA, and closed just below its 20 week EMA in long-term bull territory. Weekly technical indicators are looking neutral to bearish. MACD is falling below its signal line in bullish zone. RSI is moving sideways at its 50% level. Slow stochastic is moving sideways at the edge of its oversold zone.
Silver chart pattern
The (purple) down trend line has been dominating the daily bar chart pattern of Silver for the past three months, showing that bears are clearly on top, and in no mood to relinquish their advantage.
A few recent attempts at upward break outs have faced strong resistances from the trend line and the 20 day EMA. Silver's price is trading below its three falling EMAs in a bear market.
Daily technical indicators are in bearish zones, but showing slight upward momentum. MACD is facing resistance from its falling signal line. RSI has bounced up from the edge of its oversold zone. Slow stochastic has emerged from its oversold zone.
On longer term weekly chart (not shown), silver's price is trading below its three falling weekly EMAs in a long-term bear market. Weekly technical indicators are in bearish zones and showing downward momentum - suggesting some more correction.
Gold chart pattern
The following comment appeared in the previous post on the daily bar chart pattern of Gold: "The past 2 months' trading has formed the 'handle', which itself is looking like a 'falling wedge' from which the likely breakout is upwards."
Note that gold's price twice dropped below its 200 day EMA into bear territory, but formed a small 'double bottom' reversal pattern. That triggered a technical bounce that has broken out above the 'falling wedge' (which is the 'handle' of a 'cup and handle') pattern.
A strong volume surge accompanied the upward break out - validating it technically. Gold's price managed to close above the 1300 level, and well above its three EMAs in bull territory after a month.
Daily technical indicators are looking bullish. MACD is rising above its signal line in bearish zone. RSI is climbing above its 50% level. Slow stochastic has entered its overbought zone, and can trigger a pullback towards the top of the 'wedge'.
After touching a high of 98.10 on Apr 26 - its highest level in 2 years - the US Dollar index dropped to a low 96.80 on May 13. Gold's price usually moves in the opposite direction to the Dollar index.
On longer term weekly chart (not shown), gold’s price bounced up after receiving support from its 200 week EMA, and closed above its three weekly EMAs in long-term bull territory. Weekly technical indicators are giving conflicting signals. MACD is moving sideways below its falling signal line in bullish zone. RSI is rising above its 50% level. Slow stochastic has emerged from its oversold zone, and can trigger a rally.
Silver chart pattern
The daily bar chart pattern of Silver had formed a 'double top' reversal pattern back in Feb '19, and has been in a down trend (marked by purple trend line) since then.
A couple of recent attempts to break out above the trend line and the falling 20 day EMA have come to nought. Silver's price is trading below its three falling EMAs in a bear market.
A silver lining for bulls is the formation of a small 'double bottom' reversal pattern near the 14.60 level. Whether the support at 14.60 holds or not remains to be seen.
Daily technical indicators are in bearish zones, and not showing any upward momentum. MACD has merged with its signal line. RSI is moving sideways below its 50% level. Slow stochastic has dropped below its 50% level after briefly moving above it.
On longer term weekly chart (not shown), silver's price is trading below its three falling weekly EMAs in a long-term bear market. Weekly technical indicators are in bearish zones and showing downward momentum - suggesting some more correction.
Gold chart pattern
The daily bar chart pattern of Gold appears to have formed a bearish pattern of 'lower tops, lower bottoms' during the past two months. However, bulls need not lose heart just yet.
Why? A couple of technical reasons: (1) Gold's chart indicates formation of a large 'cup and handle' pattern - with a possible upward breakout above 1350; (2) The past 2 months' trading has formed the 'handle', which itself is looking like a 'falling wedge' from which the likely breakout is upwards.
There is an important caveat. Gold's price had dropped below its 200 day EMA into bear territory, and touched a low of 1266 on Apr 23 before recovering a bit. A fall below 1260 - which is at the mid-point of the 'cup' - can negate the 'cup and handle' pattern.
Daily technical indicators are looking bearish. MACD is facing resistance from its falling signal line in bearish zone. RSI is below its 50% level. Slow stochastic has emerged from its oversold zone, but its upward momentum has stalled.
After touching a high of 98.10 on Apr 26 - its highest level in 2 years - the US Dollar index has slipped below 97.50 on Apr 2. Gold's price tends to move in the opposite direction to the Dollar index.
On longer term weekly chart (not shown), gold’s price bounced up after receiving support from its 200 week EMA, and closed above its three weekly EMAs in long-term bull territory. Weekly technical indicators are looking bearish. MACD is falling below its signal line in bullish zone. RSI is seeking support from its 50% level. Slow stochastic has fallen inside its oversold zone, and can trigger a technical bounce.
Silver chart pattern
The brief foray into bull territory during the first two months of the year appears to have come to an end for the daily bar chart pattern of Silver.
Silver's price has formed a bearish pattern of 'lower tops, lower bottoms' and is trading below its three EMAs in a bear market. Throughout April '19, silver's price faced resistance from its 50 day EMA, and fell further below its falling 200 day EMA.
Daily technical indicators are in bearish zones. MACD has merged with its signal line. RSI is below its 50% level. Slow stochastic has emerged from its oversold zone, but not showing much upward momentum.
On longer term weekly chart (not shown), silver's price faced resistance from its 20 week EMA, and closed below its three weekly EMA in a long-term bear market. Weekly technical indicators are looking neutral to bearish. MACD is in neutral zone. RSI is moving sideways below its 50% level. Slow stochastic has entered its oversold zone. Some more correction is possible.
Gold chart pattern
The daily bar chart pattern of Gold has formed a large 'cup and handle' continuation pattern. The pattern is more clearly visible on the 50 day EMA. An upward breakout can be expected after the 'handle' formation is complete.
Note that a fall below 1260 - which is at the mid-point of the 'cup' - will negate the 'cup and handle' pattern. Gold's price is trading above its rising 200 day EMA in a bull market.
Daily technical indicators are looking neutral to bearish. MACD is moving sideways below its signal line in bearish zone. RSI is facing resistance from its 50% level. Slow stochastic has emerged from its oversold zone.
After a sharp rise above 97.70 on Mar 7, followed by a sharp fall to 95.20 on Mar 20, the US Dollar index recovered to 97.10 on Apr 2. It has been consolidating between 97 and 96.50 since then. Gold's price has been consolidating as well.
On longer term weekly chart (not shown), gold’s price closed above its three weekly EMAs in long-term bull territory. Weekly technical indicators are giving mixed signals after correcting overbought conditions - hinting at more consolidation or correction.
Silver chart pattern
The daily bar chart pattern of Silver had a brief foray back above its three daily EMAs into bull territory, and an intra-day move above 15.60 before bears decided to take charge again.
Silver's price dropped below its three EMAs, and the 14.90 level on Apr 4, before pulling back towards its falling 20 day EMA. It remains below the 200 day EMA in bear territory.
Daily technical indicators are in bearish zones. MACD is facing resistance from its sliding signal line. RSI is trying to move up to its 50% level. Slow stochastic has emerged from its oversold zone.
On longer term weekly chart (not shown), silver's price is facing resistance from its 20 week EMA, and closed well below its 200 week EMA in a long-term bear market. Weekly technical indicators are looking neutral to bearish. MACD and RSI are in neutral zones. Slow stochastic is falling rapidly towards its oversold zone. Some more correction may follow.
Gold chart pattern
The daily bar chart pattern of Gold bounced up from the lower Bollinger Band and crossed above its 50 day EMA, but faced strong resistance from the middle Bollinger Band (20 day SMA, marked by green dotted line).
Gold's price is consolidating near the 1300 level, and managed to close well above its 200 day EMA in bull territory.
Daily technical indicators are looking neutral to bearish. MACD is moving sideways below its signal line in bearish zone. RSI is facing resistance from its 50% level. Slow stochastic remains in bearish zone after recovering from oversold condition.
After a sharp rise above 97.50 on Mar 7, the US Dollar index has dropped below 96.50. That helped gold's price to rally from its Mar 7 low of 1281.
On longer term weekly chart (not shown), gold’s price closed above its three weekly EMAs in long-term bull territory for the 12th week in a row. Weekly technical indicators are showing downward to sideways momentum in bullish zones, hinting at more consolidation or correction.
Silver chart pattern
The following remark was made in the previous post on the daily bar chart pattern of Silver: "Slow stochastic has entered its oversold zone, and can trigger a pullback towards the 200 day EMA."
The expected pullback crossed above the 200 day and 50 day EMAs, but faced strong resistance from the 20 day SMA (middle Bollinger Band, marked by green dotted line). Silver's price is below its three EMAs in bear territory.
Daily technical indicators are looking bearish. MACD is facing resistance from its falling signal line. RSI is below its 50% level. Slow stochastic has emerged from its oversold zone, but is showing downward momentum.
On longer term weekly chart (not shown), silver's price faced resistance from its 50 week EMA, formed a 'long legged doji' candlestick and closed well below its 200 week EMA in a long-term bear market. Weekly technical indicators are in neutral zones, and showing sideways to downward momentum. Some more correction or consolidation may follow.
Gold chart pattern
The daily bar chart pattern of Gold received good support from the middle Bollinger Band (20 day SMA, marked by green dotted line) and rose quickly to touch a high of 1349.80 on Feb 20.
By closing above the upper Bollinger Band, the door was left wide open for bears. Gold's price corrected sharply below the lower Bollinger Band and closed below its 50 day EMA after more than three months.
Daily technical indicators are showing downward momentum after correcting overbought conditions. MACD is falling below its signal line in bullish zone. RSI has dropped below its 50% level. Slow stochastic has entered its oversold zone, and can trigger a pullback towards the 50 day EMA.
After a sharp fall below 96 on Feb 26, the US Dollar index is rising towards 97. That seems to have dampened bullish enthusiasm. The strong rally from the Nov '18 low has ended.
On longer term weekly chart (not shown), gold’s price dropped to seek support from its 20 week EMA, and closed above its three weekly EMAs in long-term bull territory for the tenth week in a row. The 'golden cross' of the 50 week EMA above the 200 week EMA has technically confirmed a return to a long-term bull market. Weekly technical indicators have corrected overbought conditions but are showing downward momentum in bullish zones.
Silver chart pattern
The daily bar chart pattern of Silver bounced up after receiving good support from its 50 day EMA and rose to test its previous (Jan 31) top of 16.29, but failed to close above it.
Silver's price pierced the upper Bollinger Band and formed a 'double top' reversal pattern. A sharp correction below the lower Bollinger Band and the 200 day EMA followed.
Daily technical indicators are looking bearish. MACD is falling below its signal line and has entered bearish zone. RSI is falling towards its oversold zone. Slow stochastic has entered its oversold zone, and can trigger a pullback towards the 200 day EMA.
On longer term weekly chart (not shown), silver's price closed below its three weekly EMAs in a long-term bear market. Weekly technical indicators are showing downward momentum. MACD and Slow stochastic are in bullish zones. RSI has fallen below its 50% level.
Gold chart pattern
Overbought weekly technical indicators led to the following concluding comment in the previous post on the daily bar chart pattern of Gold: "A pullback towards 1300 is a possibility."
The expected pullback touched an intra-day low of 1304.70 on Thu. Feb 14, but bounced up after receiving support from the rising 20 day EMA. Gold's price is trading above its three rising EMAs in a bull market.
Daily technical indicators have corrected overbought conditions, but remain in bullish zones. MACD is below its signal line but its downward momentum has stalled. RSI is moving up towards its overbought zone. Slow stochastic has stopped falling but is not showing any upward momentum yet.
After a sharp rise, the US Dollar index is sliding down a bit. That ought to encourage bulls to push gold's price higher.
On longer term weekly chart (not shown), gold’s price closed above its three weekly EMAs in long-term bull territory for the eighth week in a row. The impending 'golden cross' of the 50 week EMA above the 200 week EMA will technically confirm a return to a long-term bull market. Weekly technical indicators are looking bullish and overbought. Lack of volume support can trigger a consolidation or correction.
Silver chart pattern
The following comments were made in the previous post on the daily bar chart pattern of Silver: "All three daily technical indicators showed negative divergences by touching lower tops, and are showing downward momentum after correcting overbought conditions. Some more correction or consolidation is likely."
Silver's price corrected below its 20 day EMA to touch an intra-day low of 15.45 on Thu. Feb 14, but bounced up after receiving good support from its 50 day EMA.
The 'golden cross' of the 50 day EMA above the 200 day EMA - though not a convincing one yet - has technically confirmed a return to a bull market. Stronger volume support is required for the rally to sustain.
Daily technical indicators are looking neutral to bearish. MACD is falling below its signal line in bullish zone. RSI has bounced up in neutral zone after briefly falling below its 50% level. Slow stochastic is falling below its 50% level, but its downward momentum has weakened.
On longer term weekly chart (not shown), silver's price closed above its 20 week and 50 week EMAs, but below its falling 200 week EMA in a long-term bear market. Weekly technical indicators are in bullish zones. MACD is showing upward momentum. RSI and Slow stochastic are moving sideways.
Gold chart pattern
The daily bar chart pattern of Gold has broken out upwards from a large 'cup and handle' consolidation pattern. What had looked like a downward breakout from a 'symmetrical triangle' pattern (refer previous post) turned out to be the formation of the 'handle' on a longer time frame.
Gold's price dropped below its 20 day EMA, but bounced up after receiving support at the 1275 level - completing the 'handle' formation. A sharp rally to 1330 was followed by a bit of profit booking.
All three EMAs are rising, and gold's price is trading above them in a bull market. The 'golden cross' of the 50 day EMA above the 200 day EMA last month had technically confirmed a return to bull territory.
Daily technical indicators are in the process of correcting overbought conditions. MACD is rising above its signal line inside overbought zone. RSI has slipped down from its overbought zone. Slow stochastic is ready to do likewise.
MACD and Slow stochastic are showing negative divergences by touching lower tops, which may have provided an excuse for profit booking.
Fears of a global economic slowdown, if not a recession, pushed the US Dollar index below 95 - triggering the upward breakout above the 'cup and handle' pattern.
On longer term weekly chart (not shown), gold’s price closed above its three weekly EMAs in long-term bull territory for the sixth straight week. Weekly technical indicators are looking bullish and overbought. MACD is rising above its signal line in bullish zone. RSI is facing resistance fro the edge of its overbought zone. Slow stochastic is rising inside its overbought zone. A pullback towards 1300 is a possibility.
Silver chart pattern
What had looked like a down trend on the daily bar chart pattern of Silver (refer previous post) turned out to be the formation of the 'handle' of a large 'cup and handle' consolidation pattern.
Silver's price dropped below its 20 day and 200 day EMAs, but bounced up after receiving good support from the 15.20 level. A sharp upward breakout above the 'cup and handle' pattern faced resistance from the 16.20 level.
Silver's price has dropped to seek support from its rising 20 day EMA, and closed above its three daily EMAs in bull territory. The 'golden cross' of the 50 day EMA above the 200 day EMA - which will technically confirm a bull market - is awaited.
All three daily technical indicators showed negative divergences by touching lower tops, and are showing downward momentum after correcting overbought conditions. Some more correction or consolidation is likely.
On longeer term weekly chart (not shown), silver's price closed above its 20 week and 50 week EMAs, but below its falling 200 week EMA in a long-term bear market. Weekly technical indicators are in bullish zones, but not showing much upward momentum.
