Tuesday, April 11, 2017

Gold and Silver charts: bears stall bull rallies

Gold chart pattern


The daily bar chart pattern of Gold has failed to make much headway during the past two weeks. The rising 20 day EMA has provided good support as gold's price consolidated sideways with an upward bias.

On Fri. Apr 7, gold's price crossed above the Feb 27 top and the 1270 level intra-day to touch its highest level in nearly 5 months; but despite strong volume support, it dropped to close below 1260.

In candlestick parlance, a 'shooting star' pattern - that often marks an intermediate top - got formed.

Gold is trading above its three EMAs in bull territory. The 'golden cross' of the 50 day EMA above the 200 day EMA will technically confirm a return to a bull market. Bears may try to prevent that.

Daily technical indicators are in bullish zones, but showing negative divergences by failing to touch new highs with gold's price. Slow stochastic is showing strong downward momentum that is hinting at a correction.

On longer term weekly chart (not shown), gold’s price is facing resistance from its 200 week EMA. The long-term bear market is intact. Weekly MACD and RSI are in neutral zones and not showing any upward momentum. Slow stochastic has formed a 'double top' reversal pattern inside its overbought zone.

Silver chart pattern


The following comment was made in the previous post on the daily bar chart pattern of Silver: "A convincing move above 18.50 - where multiple tops were formed in Feb '17 - is required if bulls wish to retain control."

On Fri. Apr 7, silver's price tried but failed to overcome resistance from the 18.50 level, and corrected sharply below its 20 day EMA. Bullish hopes may remain alive as long as silver's price trades above its 200 day EMA.

Daily technical indicators are in bullish zones, but looking bearish and showing downward momentum. Expect some consolidation or correction.

On longer term weekly chart (not shown), silver’s price closed above its 20 week and 50 week EMAs, but below its sliding 200 week EMA in a long-term bear market. Weekly MACD and RSI are in neutral zones. Slow stochastic is about to drop from its overbought zone.

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