has been trading within range market, a symmetric triangle pattern
to be exact. Elliot Wave
theory says a triangle is overlapping five waves affair that subdivides 3-3-3-3-3. The chart shows how I draw those five waves pattern in the triangle. Wave 'e' seemed to end with a shooting star
candle, which shows rejection from the resistance area
has tried that zone 3 times but failed. If the five wave pattern unfolds exactly as shown above, gold
will likely to move lower and break the support trend line
Many people would wait for a break out to trade. But as I mentioned above, accordingly to Elliot Wave
plus a shooting star
candle appeared on the downtrend line, I would want to short this market with a tight stop loss. Once gold
breaks out to the downside, it will go quickly to the support around 1310.
Otherwise a daily close above 1350 would confirm a break out to the upside. That's where I want to put my stop loss.
- Sell 1 contract at $1346/oz.
- Stop loss above 1350 (on a daily close).
- Take profit 1310.