Gold: Too Early for a Trend Reversal
Updated
I was discussing with other traders in the Gold Discussion ChatRoom about the high volatility of Gold futures these days. My opinion, as stated in the linked idea, is still bullish. When trading commodities and stocks in consolidation phase or with high volatility, I usually check the "On Balance Volume" (OBV) Indicator looking for a divergence. This indicator bases on the fact that volume precedes prices. Divergences between OBV and price could help to identify a trend reversal (and they are a strong signal).
In the chart, I graphed the positive trend in green (starting from December 2019) and the recent retracement in red (last two days). OBV indicator is still high (showing bullish strength), and there is no divergence with the price level.
Disclosure: My ideas contain statements and projections based on assumptions on capital markets, and therefore inherently subject to numerous risks and uncertainties.
Before buying or selling any stock you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal.
I am not a financial advisor.
In the chart, I graphed the positive trend in green (starting from December 2019) and the recent retracement in red (last two days). OBV indicator is still high (showing bullish strength), and there is no divergence with the price level.
Disclosure: My ideas contain statements and projections based on assumptions on capital markets, and therefore inherently subject to numerous risks and uncertainties.
Before buying or selling any stock you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal.
I am not a financial advisor.
Note
Please note: all "Gold" references are related to "Gold Spot / U.S. Dollar (FX:XAUUSD)" and not to other contracts.
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