Bearish Wedge for Gold in the Making?
Updated
This is still very premature so important to wait for the correct signs to play out first. Also because Gold is still in a very strong up trend and big chance it will continue to do so with the stock market dumping lately.
However, there is a decent chance this wedge is real. It's not complete yet, so maybe it's just a big coincidence, but that's why i think it's best to see it complete first. For that to happen, we want to see one more wave up. Ideally with stock market dropping (which normally causes Gold to go up). But then in the 1710 zone, seeing Gold have a hard to to push through it. Like i have drawn on the left, actually similar to the high we just made (orange circle). If this plays out, i think it's a great RR to play it. Because, even if stock market continues to dump, we could see a similar situation as a week ago (yellow circle candle). Where Gold started to dump very big because there was a lot of panic in the stock market, which causes a lot of margin calls and traders/funds have to free up funds and because of that sell their Gold. The target of the wedge is around 1650, but i think it could go much lower even if the wedge plays out.
I usually try to get in half around the high of the wedge and the second half at the break of it's support. Then when the wedge breaks, lowering stop loss closer to entry level to reduce risk.
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Previous analysis:
However, there is a decent chance this wedge is real. It's not complete yet, so maybe it's just a big coincidence, but that's why i think it's best to see it complete first. For that to happen, we want to see one more wave up. Ideally with stock market dropping (which normally causes Gold to go up). But then in the 1710 zone, seeing Gold have a hard to to push through it. Like i have drawn on the left, actually similar to the high we just made (orange circle). If this plays out, i think it's a great RR to play it. Because, even if stock market continues to dump, we could see a similar situation as a week ago (yellow circle candle). Where Gold started to dump very big because there was a lot of panic in the stock market, which causes a lot of margin calls and traders/funds have to free up funds and because of that sell their Gold. The target of the wedge is around 1650, but i think it could go much lower even if the wedge plays out.
I usually try to get in half around the high of the wedge and the second half at the break of it's support. Then when the wedge breaks, lowering stop loss closer to entry level to reduce risk.
Don't forget to like if you appreciate this :)
Previous analysis:
Note
In hindsight, think i misread the wedge a bit. I assumed the third leg up would still had to be made. But think the yellow circle leg, was prob the second one already, where i assumed it was not a complete leg. So the wedge already played out and reached its target. At the moment, a lot of panic in the markets, which could cause Gold to dump again like it did a week ago as well on Friday. Looks like a bear flag, think if it breaks down, could dump much more as i suggested aboveNote
Taking a lot of time now, mot much room left. The setup is there, as you can see what looks like a neckline on the left. But should not forget, Gold is still super strong, so bear traps can easily happen. Think for now, should stay below that red zone on the right around 1675ish
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