Gold - Long term short position (Monthly Charts)
Break of a major multi year trend line with price action now heading to test the break out level near 1240 - 1250 levels.
RSI divergence points to a decline with T1, T2 being potential areas of bounce (book partial profits here).
T3 - Divergence target at 725.
Bearish pennant formation near trend line.
Could take a year or maybe into 2016 for targets to be completed.
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Trade Plan:
Switch to Weekly charts for possible bearish candlestick patterns near 1240-1250 levels with 3 positions, targeting T1, T2 and T3 respectively.
Stops near 1388 - 1440.
Alternate view:
Based on the bullish divergence of higher low of RSI, if price breaks above 1240/1250, it is sure to retest this level for support (making it a sound plan to exit shorts on the bounce.
RSI divergence points to a decline with T1, T2 being potential areas of bounce (book partial profits here).
T3 - Divergence target at 725.
Bearish pennant formation near trend line.
Could take a year or maybe into 2016 for targets to be completed.
-----------------------------------------------
Trade Plan:
Switch to Weekly charts for possible bearish candlestick patterns near 1240-1250 levels with 3 positions, targeting T1, T2 and T3 respectively.
Stops near 1388 - 1440.
Alternate view:
Based on the bullish divergence of higher low of RSI, if price breaks above 1240/1250, it is sure to retest this level for support (making it a sound plan to exit shorts on the bounce.
