Gold Bulls Are Ready To Profit – Are You?
Arslan Butt • 1 min read
The precious metal gold has traveled nearly 190 points after breaking out of a bearish channel. In my previous update, I recommended entering a buy position above $1225. It moved in line with our trading levels. However, the bullish move was a bit too quick to catch.
Nonetheless, the gold is resting in a trading range of $1240 – $1244 and it's likely to determine it's next trend upon breaking the range.
Gold – 4-Hours Chart – Bearish Channel Breakout
Technically, the metal needs to break on the lower side. This is because the momentum indicators, the RSI and Stochastic, above 80 & 70 respectively, are signaling that the bulls are exhausted. In this scenario, investors try to close their position in profit to avoid the risk of reversals. That's what I'm looking to do.
Furthermore, on the daily time frame, we can see a trend line extending a resistance at $1244. Not only this, gold has also formed a hanging man on the 4-hour chart. For us, it's another sell signal. For more about Candlesticks, refer to our Fx Leader Candlestick trading strategy article.
Gold Trading Idea
I have opened a sell signal at $1241.50 with a stop loss above $1246 and take profit at $1236. Since the trading volume is thin, the trading signal may take more time to mature.