Gold Potentially Retracing, Prepare to Buy Long
Technicals:
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$16.03 and $16.61 are approximately the short term support and resistance levels, forming a channel where the price is being pulled horizontally. This area also appears to be a price consolidation point around $16.38 following an April 20th high volume day.
Fundamentals:
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Gold is trending up. This momentum is due both to the medium term high VIX volatility and an overall pattern of prices rising after a market correction/downturn event. This correlation of gold to volatility and market correction follows a similar pattern from 2006 to 2011.
Strategy:
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Longer term call options are ideal for the current market. Purchase 3-month long call options if IAU breaks through $16.60 or if it retraces to $16.03.
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$16.03 and $16.61 are approximately the short term support and resistance levels, forming a channel where the price is being pulled horizontally. This area also appears to be a price consolidation point around $16.38 following an April 20th high volume day.
Fundamentals:
------------------
Gold is trending up. This momentum is due both to the medium term high VIX volatility and an overall pattern of prices rising after a market correction/downturn event. This correlation of gold to volatility and market correction follows a similar pattern from 2006 to 2011.
Strategy:
-----------
Longer term call options are ideal for the current market. Purchase 3-month long call options if IAU breaks through $16.60 or if it retraces to $16.03.
Note
The market has already returned to its early March prices, effectively completing a 10-15% price correction. From this point forth, many stocks that have returned to similar levels will be trading in a more rational response to fundamental performance. Earnings reports, market reactions, and basic trends will be more important than the overall bullish attitude.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.