Technical Brief: Dip to Buy Coming in Gold

Gold

Technical Brief: Dip to Buy Coming in Gold

Background

Last week as Gold was testing the 100 DMA we layed out potential trades. Here is the accompanying chart to that post titled: Technical Update: Gold Holding $1290 gets you $1349

Here is the subsequent post's specific recommendations. We did not participate in this rally as speculators, preferring to wait for a dip. We missed it But the more aggressive play was the way to go:

Bullish Trades
Bull Flag Break- The "safe" Bull trade is to wait for the Bull flag to break on a weekly close. Then buy the next week on any pull backs to the channel top.- Patient, macro trade. Will challenge risk/reward metrics.
Double Bottom Buy in- The more aggressive trade is to use the daily chart and buy here looking at the double bottom area as your stop out.- there may be pain on way to a decent target of $1380
Let Them Sell the Hole- The momentum trade is to hope for a test and penetration of the double bottom. Hope the momo sellers come in. Then look for the new daily low tonot be corroborated by the RSI.- Great risk reward. Stop outs likely. Be ready to put it on and get stopped out multiple times (like Tudor does). Might not happen. But would fit nicely in the EW analysis above.

Source- Gold Technicals: Bull, Bear, and Red Flags

There is a Gold Trade Right Now We Like

We do not love it, preferring to play better risk rewards and having Volatility give us a sign before the initial move. But it is a valid trade based on a bullflag forming. We prefer buying strength breaking out of a Bull flag. But the pure technicians see a potential bull flag and buy it with a stop out below the extrapolated line. As long as you are comfortable with the risk reward andhave speculative money, then these are worth looking at. Think for yourself is our disclaimer and recommendation. So here it is.

The Bull Flag Bet

Interactive Chart HERE

Buy Gold on weakness between $1338 and $1335- old School Tudor style. could be days from now if a bullflag
Stop Loss is $1331 close or $1327 on a print.- congestion area includes bottoming from August
The target, which we agree is $1380 with a possible extension above $1400- problem is descending line (not drawn)from July and Aug highs hitting right where we are now.