Gold got hit hard today, 33.31$ down to 1330.96$ in a day. The USD$ went up 1.291 to 78.225 and the EUR/USD dips to 1.3724 and looses 1.46% in a day. A close friend came over yesterday and told me if it was ok to go short on the EUR/USD. I felt it (actually what I did was analyze the chart) was topping but I did not have enough confirmation so I told him to wait until on a 5 minute chart the lowest low was taken out, and that was around 1.3880. So he went short today and it went down hard. I didn’t ask him how much leverage he took but I guess between 10 and 20.
I will add some more how to trade articles soon, so do not worry you will be served.
Back to gold. Please take a look at the chart and tell me what you see? At first gold rises nicely until the end of September then it just lifts off. To be honest I do not like to go on board just somewhere in the middle when it lifts off like that. I am more someone that buys around August or September somewhere when a lot of people return from holiday. Also historically it is a good time to buy metals around August to September.
What we can also see in the chart is that there was a divergence in RSI and after a big rise and prices so far away from a trendline for me that means to much of a risk. So when you analyze a chart keep in mind the following:
- Look for divergence on different time frames
- Look how long (days) a stock has been rising and look how much days it climbed in the past? So look at the cycles.
- Draw your trend lines?
- Did a stock break through a previous high or low?
- Look at stochastics to see if a stock is oversold or overbought.
- When you are into Elliot Wave, count the waves to see how far a stock may go.
- Also look at historicals, when do prices mostly rise for the stock that you are analyzing?
- Did a stock have a dip? I like to buy after a nice dip.
- Is a stock trading choppy or nicely trending? I only like nicely trending stocks.
YeOldGoldNugget asked me if I would buy Gold a while ago but I said no I just wait for a dip to get on board, and now we have a nice dip. So someone listened to me :-). Will it go as far as 1310$-1320$ and touch the trend line and go back up? There is a good chance for that, but watch out if the trend line breaks.
You can also read another article named: Gold futures fall on another site.