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Tuesday, November 3, 2015

Gold and Silver charts: bear domination resumes

Gold chart pattern

Gold_Nov0215

The daily bar chart pattern of gold had broken out and closed above its 200 day EMA on Wed. Oct 14, but the foray into bull territory did not last long.

Overbought technical indicators had indicated the possibility of a correction below the 200 day EMA. After finding brief support from its 20 day EMA, gold’s price crashed swiftly below all three EMAs.

US Fed’s hawkish stance about an interest rate hike put paid to bullish hopes.

Daily technical indicators are looking bearish and showing strong downward momentum. MACD is falling rapidly towards its negative zone. RSI has dropped below its 50% level. Slow stochastic has dived inside its oversold zone.

Note the bearish ‘rounding top’ patterns formed by the 20 day EMA and the MACD signal line. Any attempt at a rally is likely to be short-lived.

On longer term weekly chart (not shown), gold’s price faced strong resistance from its 50 week EMA, and closed well below its three weekly EMAs in a long-term bear market. MACD is moving sideways in negative zone. RSI has crossed below its 50% level. Slow stochastic is falling towards its 50% level.

Silver chart pattern

Silver_Nov0215

The daily bar chart pattern of silver hovered around its 200 day EMA for almost the entire month of Oct ‘15 in a desperate effort to return to bull territory.

Silver’s price received good support from its 20 day EMA and rose to touch a 4 months high of 16.40 on Oct 28, but eventually succumbed to selling pressure from bears.

Daily technical indicators are looking bearish and showing downward momentum. MACD crossed below its signal line and is falling in positive zone. RSI has slipped below its 50% level. Slow stochastic has dropped like a rock to enter its oversold zone.

Silver’s price is seeking support from its 50 day EMA, but the support is unlikely to hold. The 2 months long bear market rally is over.

On longer term weekly chart (not shown), silver’s price failed to overcome strong resistance from its 50 week EMA, and is trading below its three weekly EMA in a long-term bear market. MACD is moving sideways in negative zone. RSI has crossed below its 50% level. Slow stochastic has dropped down from its overbought zone.

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