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RHB Retail Research

Author: rhboskres   |   Latest post: Fri, 14 Jun 2019, 5:10 PM

 

COMEX Gold - Bearish Harami May be for Real

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Maintain long positions until the trailing-stop is breached. The Comex Gold formed a black candle in the latest trading. It weakened USD11.70 to close at USD1,292. The intraday tone was negative as it generally moved lower for the whole session, the low and high were posted at USD1,289.90 and USD1,305.10. The sharp decline was a follow-up from the 14 May’s “Bearish Harami” formation, this has invalidated our previous bias that a minor sideways consolidation was a likelier scenario. Should there be further negative price actions in the coming sessions, this would nullify our positive bias – as it would signal that the recent breakout from the downtrend line (as drawn in the chart) was a fake one. Until we see this, we maintain our positive trading bias.

Pending further negative price signals to invalidate our positive bias that the commodity is resuming its upward move (that started from the low of USD1,162.70 on 16 Aug 2018), we continue to recommend traders stay in long positions. These were initiated at USD1,290.20, which was the closing level of 1 May. A stop-loss can now be placed at the breakeven level.

Immediate support is set at USD1,267.90, or the low of 23 Apr. This is followed by USD1,236.50, ie the low of 14 Dec 2018. Conversely, the immediate resistance is set at USD1,330.80, which was the high of 25 Mar. This is followed by USD1,349.80, or the high of 20 Feb.

Source: RHB Securities Research - 17 May 2019

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