GOLD - Short setup with head and shoulders inside decision zone
Welcome to this mid-term analysis of GOLD. Since October until mid February, GOLD traded within a bearish rising wedge. This pattern got a high success rate and is worth taking note of when it’s showing up on charts.
Once we fell out of the wedge, it happened with strength and volatility. Fortunately GOLD stopped where it should, the top $1200s. This zone was the chop from the flag prior to the local top and naturally got a fair amount of strength to it. It’s likely we will flag around the orange zone and down to $1280 based on the fact the flag prior to the local top lasted 30days.
This price action have possibly created the well-known pattern head and shoulders. We had a flag before breaking $1300 acting as the first shoulder, a rally up to $1340 as the head, then a dump down to $1280, the neckline, and we’re now flagging as the second shoulder below $1300.
If you think this setup will play out, I would place a short SL above $1307 to be stopped out ABOVE a local level, and not below it. The potential risk/reward rate is very good if we close this daily candle below $1300.
The orange zone marked have a history of being a point of decision and indecision. This is basically a zone well respected by chartists and traders, and is naturally a turn point for the price action. Several pumps and dumps have ended up inside this orange zone and immediately reversed. This didn’t happen this time, making me think we could have more downside coming.
There’s a certain possibility of GOLD continuing up, so you shouldn’t risk all your cards on the head and shoulders playing out. In case we continue up, I’m looking to close some longs and re-add to my shorts inside the red zone. If the head and shoulders pattern plays out, I will take profit inside the green boxes, and move my SL down manually, trailing the price. My plan is to re-add to my longs around $1210.
That’s it for now! Feel free to share your opinion in the comment section or ask me any question you’d like! Goodbye for now :]
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Once we fell out of the wedge, it happened with strength and volatility. Fortunately GOLD stopped where it should, the top $1200s. This zone was the chop from the flag prior to the local top and naturally got a fair amount of strength to it. It’s likely we will flag around the orange zone and down to $1280 based on the fact the flag prior to the local top lasted 30days.
This price action have possibly created the well-known pattern head and shoulders. We had a flag before breaking $1300 acting as the first shoulder, a rally up to $1340 as the head, then a dump down to $1280, the neckline, and we’re now flagging as the second shoulder below $1300.
The orange zone marked have a history of being a point of decision and indecision. This is basically a zone well respected by chartists and traders, and is naturally a turn point for the price action. Several pumps and dumps have ended up inside this orange zone and immediately reversed. This didn’t happen this time, making me think we could have more downside coming.
There’s a certain possibility of GOLD continuing up, so you shouldn’t risk all your cards on the head and shoulders playing out. In case we continue up, I’m looking to close some longs and re-add to my shorts inside the red zone. If the head and shoulders pattern plays out, I will take profit inside the green boxes, and move my SL down manually, trailing the price. My plan is to re-add to my longs around $1210.
That’s it for now! Feel free to share your opinion in the comment section or ask me any question you’d like! Goodbye for now :]
If you like it and would like to receive future updates - Please, follow me on TradingView!
If you follow me, I guarantee you will receive timely updates to this chart, and all other interesting tickers. This will allow you to stay on top of the assets current trend and hopefully maximize your profits!
For support, sign up to Binance and Bitmex with these links for referral
www.bitmex.com/register/JFOhf7
www.binance.com/?ref=107992...
If you agree, please, Like this Idea - This would be the best feedback and encouragement for me!