Gold swing trades – week of Dec. 7, 2015

Last week

151204-gold price

Gold futures, week ending Dec. 4, 2015

GOLD tested the prior week’s low, but later regained its support level $1072 on Friday in reaction to the ECB stimulus plan and better than expected Non-Farm Payroll data in the US.. It closed with a 2.6% net weekly gain.

The headline for the non-farm payroll report Wednesday was good, and led traders to assume the Fed will probably hike rates this month. But if we take a close look, some of the numbers are a little suspect. a rate increase in December is not a certainty.

Last week’s trades

It was a terrific week for Nat’s traders. Her weekly swing trades captured three successive moves that totaled about $6,600 in profit for traders who caught all of each move. That is close to the best result for the year.

  1. The first trade, on Monday, was a move up from Nat’s key line that carried on to the first resistance level around $1073, for a profit of about $20 per contract.
  2. The second trade on Tuesday was a reversal from the resistance back down to Nat’s key line, also worth about $20 per contract, or perhaps a little less for traders who waited for the bounce from the pivot level and entered around $1067.
  3. The third and best move was a move back up to the key line on Thursday, followed in overnight trading by a break-out through the key line. The breakout stalled at a congestion area around the pivot before breaking out to new highs. That move was about $30 from the key line to the top, about $26 for traders who exited at Nat’s first sell level. In dollar terms, the total move was worth $2,600 to $3,000 profit per contract.

All of the moves were well-defined for anyone who followed last week’s plan, and gave big returns. You can see last week’s plan here.

Here’s the annotated chart.

Gold futures - 60-minute chart

Gold futures – 60-minute chart

 

This week

After declining sharply almost the whole month of November, gold is extremely oversold for all time-frames: long-term, intermediate and near-term. We think it was an oversold bounce triggered by the extremely oversold condition that led the price up about $40 on Thursday and Friday. This oversold bounce could continue for the rest of the year.

Based on the daily chart, the recent short-term downtrend channel was broken on Friday. GOLD not only regains control of the former broken support at $1072 level, it also managed to close above the short-term momentum resistance line for the first time since Nov. 29. The price action was bullish with high volatility.

Member content

Download the full trading plan here: 151207-gold-plan

Gold futures - daily chart

Gold futures – daily chart

This week the $1070 level will remain a key line to watch. A move below it could lead GOLD to retest last Friday’s low area around $1057-62 — or lower.

Remaining above $1070, and especially staying above $1078-$1080 could push GOLD back up to Friday’s high at $1088-$1090.40 or higher to challenge the $1100-05 psychological resistance zone.

Because long-term and intermediate-term charts are all oversold, short-covering and profit taking could hold up the price up to the year end. If the price dips to any of the major support levels expect the buyers to show up.

LONG-TERM SUPPORT at $1007.7-1033.90 – Yearly breakout level from Year 2008- 2009;
LONG TERM Trend line SUPPORT at $1009.50 this week.
INTERMEDIATE TERM SUPPORT at $1045-1035 zone