Gold ready to attack new highs

 

Continuation H&S pattern would have target of $2,042

The daily Gold market chart has been forming a possible continuation inverted H&S pattern. If this interpretation is correct the only question is if the right shoulder low has been established or if further right shoulder construction is needed.

The decline on Thursday appeared to wash out weak longs. An advance and close above the Mar. 21 high would complete a  candlestick hikkake buy signal. This would give some credance to the change a right shoulder low is in place.

A decisive close above the Feb. 28 high is required to complete this H&S pattern and establish a target at $2,042.

Charting is not a science. It is important to note that chart patterns cannot be officially labeled until they are completed. Until then charts are subject to creating alternative construction. And, even a pattern, once completed, is subject to failure. There is an alternative interpretation in Gold that must be pointed out. The H&S interpretation assumes that the Sep. 26 low was an out-of-line movement. However, if we take the Sep. 26 as is, then the daily and weekly charts can be interpreted as a possible 7-month descending triangle, a pattern with significantly bearish implications.

Markets: $GLD, $GC_F

 

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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