Reasons for the trade:
- Gold breakout on 2014-01-23 of from Feb2013 / Aug2013 highs
- Breakout helped achieve a swing high of 1391.97 that should be surpassed if up trend is to resume by taking 1433.61 high
- 1279.10 was the high achieved after the breakout and where a retest of the breakout point occurred, pushing down to the 1237.93 low.
- Considering that the breakout of the 2013 is valid, it's expected to see buyers emerge at the former resistance 1279.10 that could now have turned support, hence the 1280 entry price.
- We're in the 50%-61.8% retracement zone of the previous 1180/1390 swing, being an acceptable pullback zone.
- We're just slightly lower than 200sma channel (magenta) with 100sma channel (blue) expected to give support.
- Stop is put just below 2014-02-06 low 1252.71 inside day.
- Notice the timing of:
- The test of 1279.10 the first day of the quarter (today).
- The to start the year.
Now, we'll let the market do the magic or the horror on the trade...
P.S: Despite the fact we're April 1st today, this isn't an April fool's joke, but a real trade ;-))