gold

Breakout Scalp For December Gold Futures

Posted Wednesday, August 29, 2018 by
Shain Vernier • 1 min read

In a live market update from Tuesday, I broke down the technical outlook for December gold futures. Since that time, we have seen whipsaw action featuring a late-session sell-off and subsequent rebound. The bullion markets certainly look to be preparing for a directional move.

At press time, December gold futures are up moderately for the session trading above the 1210.0 handle. Make no mistake, this is a critical technical level. If we see another late day sell-off in bullion, a bearish washout may develop beneath Tuesday’s low (1205.8).

December Gold Futures Technical Outlook

For the first time in months, December gold futures have been showing signs of life on the daily time frame. Price briefly broke above daily resistance levels, prompting a Bollinger MP/Daily SMA crossover. The crossover is a signal of changing market state — if correct, this one projects continued bullish sentiment.

December Gold Futures (GC), Daily Chart
December Gold Futures (GC), Daily Chart

Here are the levels to watch for the remainder of the session:

  • Resistance(1): Daily SMA, 1210.7
  • Resistance(2): Bollinger MP, 1213.4

Bottom Line: In the event that price tests Tuesday’s low, a washout of intraday long stop losses is very likely. For the remainder of the session, I will have sell orders in the queue from 1205.7. This is a breakout scalp setup, with a profit target of 8-12 ticks using a maximum 1:1 risk vs reward scenario.

The goal is quick and positive price action. While entry is still quite a ways off, this trade may set up toward today’s closing bell. In the event that it goes unelected, then a breakout setup to either the bull or the bear will be in the cards for tomorrow’s session.

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About the author

Shain Vernier is our US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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