Synopsis:
1) The major support level on the weekly chart is placed at $1562.9 which is also a lower end of the bollinger band.
2) The MACD and StockRSI have not turned positive yet.
3) The possible HEAD & SHOULDER can be considered as completed only if Gold touches $1771. So, until the pattern i completed it can be said that the commodity has formed double top below $1800.
4) On the daily chart at $1647, the support has been placed. The recent fall in the Gold US prices have been halted at $1647 for 8 sessions.
5) The MCX Gold has crossed the major hurdle of Re.28100.
In short, the US spot has been upholding the support at $1647 for 8 sessions on closing basis. In the MCX, gold has crossed the major hurdle of 28100. Which suggest that until it is above 27710, it is positive. Certainly, if a trader wants to create long position, he should be entering at a price of 27900 -27950 rather than jumping at the current price and maintain 27640 be maintained as strict stoploss.
But, it is also important to note that Gold has been trading 200 Day Simple Moving Average in US Spot market after 3 years.
In MCX, last C.Y. 11, Gold has gained 35% and a correction is certainly due. So, once it starts trading below 27310, the selling pressure will start building up.
In short, as the commodity has taken support at $1647 for 8 sessions and the 4hr and 8 hr charts seems turning positive one can create long position as mentioned above, but the mentioned stoploss be followed strictly.
Once, 27310 is broken, the short position can be created with 27710 as stoploss.
The weekly Inverted HEAD & SHOULDER pattern can be taken only when it is formed and not until.
-Sheetalpuri Goswami
+919879028295
Important Note: The views expressed are based on my observations only and these are not the recommendations of my employer IFCI Financial Services Ltd or any of my previous employers.
