Is This the Tradable Breakout in Gold?

May 14, 2015: 9:26 AM CST

Wednesday saw a huge impulse movement for Gold into a key target.  What happens if Gold breaks through the current key target resistance level?

Let’s highlight our key levels and plan for the immediate future:

A quick look at the Daily Chart shows a recent sideways consolidation between $1,180 and $1,220.

Note the Fibonacci Retracement Grid which places the 50% “Halfway Point” into the current $1,225 level.

We’ll simply focus our attention at the $1,225 pivot and plan accordingly.

Also note the resistance/reversal intraday candles from February and April that occurred into $1,225.

For now, we’ll note an upside breakout above the $1,225 zone to target a swing toward $1,245.

If gold buyers can push the price firmly beyond the $1,245/$1,250 level then it would trigger a movement into a visual “Open Air Pocket” which means gold could move quickly, impulsively back toward the $1,300 per ounce level.

Otherwise, $1,225 is our focal point for a possible resistance swing down toward $1,206 and possibly under $1,200 to continue the mini-range.

Here’s the same chart with a few more indicators and volume added:

Today’s price action takes gold ABOVE the falling 200 day Simple Moving Average along with the upper Bollinger Band.

Once again, a sustained movement higher could result in a swing toward the $1,300 level into the future.

Volume was noticeably strong on yesterday’s strong bullish impulse bar which suggests buyers do have the wind at their back to trigger a short-squeeze and breakout.

Whatever other strategies you’re using to trade or study gold, be sure to incorporate the current levels and simple targets into your planning.

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Corey Rosenbloom, CMT
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1 Comment

One Response to “Is This the Tradable Breakout in Gold?”

  1. Remash Says:

    We need to be very careful about key levels as that can help us make good profits in a very consistent way. When I started trading, it was my first wish to get use to key levels because they can be very profitable and there is low risk due to mostly been right. I am greatly helped by the fact that I am using one of the greatest platform ever cTrader, it’s provided by my broker OctaFX and that really makes it easy to do trading due to great service and upgraded system.