Written By:- Harish Shahi, Sr. Commodity & Forex Analyst
Recent picture of daily chart depicts that gold is trading in particular range of $1440 to $1380 level after marking the high of $1440 level but yesterday we have seen strong bullish sentiments where bulls were dominating the bears.
The recent candle is bullish marabuzo candlestick or bullish engulfing candlestick which suggests that further buying it still on the cards. We may see strong buying above $1440 level as it’s a strong resistance level. A valid breakout of $1440 level will open the way towards the $1500 and $1550 level in coming weeks but there must be a daily closing above $1440 level will only confirm the further bullish sentiments.
The Elliot wave theory analysis suggest that first and second wave have been completed and the third wave is in process of formation however we will get clear confirmation of this wave if we see bulls above the $1450 level on closing basis. On contrary if bulls unable to sustain at the current level and if they slipped from here in that case, we may see again a selloff towards the $1380 level. The primary along with secondary trend is up so in an uptrend market buy on dips will be profitable strategy.
In the last week of June month bulls marked a high of 1439.14 levels but could not sustain at that level and slipped to $1380 level from next day onwards. Well after arriving at $1380 level bulls again made a counter attack and the previous selloff proved as profit booking.
Presently yellow metal is trading and sustaining above $1400 level which is providing strength to bulls and negates bearish sentiments. The tug of war is going on between bulls.Well some correction can’t be ruled out but since starting of the June month, we are witnessing that bulls are rocking and seems in party mood as they have made a sharp rally from $1305 to $1439 which is a more than $100 hike in just few weeks. Well bulls are making successively higher highs and higher lows where a rounding bottom pattern completed successfully which we have mentioned in our previous report.
In our previous report we have written to buy it from $1380 level for the target of $1430 level which has been achieved easily, we are happy to say that our readers must have made profit from this move and last week the first phase of bulls run completed successfully.
There is no resistance align but it has given the valid breakout of $1400 level and gold came at these levels after 6 year i.e. after 2013 year i.e. multi year’s high. Further buying is still awaited and it seems clearly that bulls have taken the charge now and they will not stop at early stage. Bulls are driving the car and heading towards north side with strong bullish sentiments. The next stumble block is $1440 level where it may face supply pressure and if gold cross up this level then we may see strong buying till $1600 level at least.
The way bulls are reacting it seems like every dip should be convert as buying opportunity. A bearish crossover on the MACD indicator is not favoring the current buying. RSI is also providing bullish signal from positive territory. The RSI has arrived into overbought territory so some correction can’t be ruled out. The $1440 level is key resistance level followed by $1480 whereas $1400 is key support level followed by $1380 level. Odds are in favor of bulls and daily to weekly bias remains bullish on the yellow metal.