Quick Updating Trade Planning and Levels to Watch in Gold GLD

Jul 24, 2013: 10:03 AM CST

Gold continued its downtrend but recently retraced to a key decision point in terms of short-term trading strategies.

Let’s zoom-in on this level and note the corresponding targets on a bullish breakout or bearish downtrend continuation.

First, the Daily Chart of GLD:

GLD Daily Gold ETF Downtrend into Resistance Chart

For the moment, the critical planning level is the $130 per share quadruple chart confluence of the falling 50 day EMA ($129.13), upper Bollinger Band ($129.99), prior price support level (polarity – as highlighted) and the simple $130 Round Number price level.

This doesn’t mean that gold is required to fall from here, but rather that traders will be emphasizing this as a key pivot level and thus like to position or re-position quickly depending on whether gold breaks higher or simply trades lower to continue the downtrend in motion.

In fact, a clean breakthrough and impulse above $130 would set the stage for a possible bullish trend reversal which would be confirmed on a break above the $137 prior June high.

The “Bullish Breakout” scenario triggers should price push above the $130 level which could result in another “snap” impulsive rally like the one we saw on the breakthrough quickly above the $125 key inflection level.

Use the same trade planning and strategy logic when the shares traded into the $125 pivot – bullish to target the present $130 level if above but bearish to continue the downtrend underneath.

Note the “Open Air” which extends to the $137 level as a first upside breakout target along with the $142/$143 level which would represent a stronger rally and distant short-term upside target.

The Bearish Thesis would simply call for a reversal lower again from the current $130 level to trade down to $125 and perhaps back to the $115 low on a sharp decline and powerful resumption of the trend.

Let’s drop to the Hourly Chart of the actual Gold Futures contract (@GC) and draw a Fibonacci Reference Grid:

Gold GC Futures Hourly Chart downtrend Fibonacci retracement

Starting near the $1,600 prior swing high from March, we can see a corresponding Fibonacci Retracement grid with the current focal point into the $1,352 ($1,350) key price area.

This corresponds with the chart above in GLD into the $135 per share level on the ETF.

We can thus add “38.2% Fibonacci Retracement” Line into the $1,350 or $135 area to add another indicator to the chart mix.

Once again, short-term trade or strategy planning tactics would be bearish under $1,350 as price moves down away from this area (initially trading to fill the $1,300 overnight gap) and then additionally bearish (pro-trend) under $1,300.

Tactics would call for additional breakout bullish short-term or intraday plays above $1,350 as price moves up away from this level toward the simple $1,400 target confluence.

Continue monitoring real-time price action relative to the current key price levels.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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One Response to “Quick Updating Trade Planning and Levels to Watch in Gold GLD”

  1. Updating Traps Trendlines and Fibonacci for Gold and GLD | Afraid to Trade.com Blog Says:

    […] Gold and GLD Jul 31, 2013: 11:29 AM CST Let’s take a moment to update the prior post “Trade Planning and Levels to Watch in Gold” with respect to the new price compression between daily moving averages, a key Fibonacci […]