Gold in Short-term Bearish Divergence and Double Top

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Gold Technical Update

March 21, 2011 - Gold in Short-term Bearish Divergence and Double Top

Simple Moving Average( SMA ) 200-period (bold, gray)
RSI-14 with Simple Moving Average 5-period of RSI attached.
Fibonacci Study
Elliott Wave Principles
Market and Price Action (patterns, candlesticks)
Intraday pivots and Intermediate-term support and resistance
Multiple Time-frame Analysis

Bullish Continuation to 1445? (3/19)

Gold (XAU/USD)
Gold 3/21/2011 1H Chart

Short to Medium Term
- Gold started the week rallying above last week's high, but pausing at 1434 . In the 1H chart, we see a bearish divergence developing as well as a small double top at the 1434 clip.
- The candlestick action suggests we might be topping here for a period. The opening gap, and 1423 remains support, and the extension in a correction should not break below the 1405 pivot for swing to complete a bullish impulse wave.
- Notice 1405 is also 61.8% retracement of the rally from 3/17 to now.
- Note also that if the current topping is merely a sideways correction, and we stay above the week's opening gap, we would see a positive reversal signal.
- This suggests a swing projection towards 1443 . The all-time high is a hair below 1445 . Then it would appear that we are still in wave 3 of a bullish impulse wave development that started 3/15.
- In the 4H chart we see that the current upswing is a second upswing (3rd wave), and if it remains above 1405 and breaks above the current high of 1434 , we have a bullish impulse wave development, and confirmation of the break above the declining channel resistance seen in the 4H chart.
- The 1445 all time high would be the first target. A break above that eyes the 1455 area n ear 150% extended retracement.
- Let's see in the next couple of days whether we do get a decline, to be followed by a rally before dipping below 1405 . If so, we can anticipate a rally in the latter part of the week towards 1445 , and perhaps towards the 1455 extension target area.

Gold 4H Chart 3/21/2011

Will gold continue to make fresh highs in such uncertain times? S ubscribe and become a membe r to share your views and join live discussions as well as webinars about the markets.

Fan Yang CMT
Chief Technical Strategist
FXTimes

 



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Commodities

Referenced Stocks: SMA

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