Checking The Band of Support In Gold and The SPDR Gold ETF at Highs

As of this moment, Gold and the SPDR Gold ETF (NYSE:GLD) are threatening another poke-out to new lifetime highs this morning, so let’s zoom-in to the daily chart and see the current chart picture and current levels to watch for positioning.

GLD Daily:

Getting straight to the point, there is a clean horizontal band of lower support in the highlighted region from $137 to $139.

That’s the level you should watch closely if trading long – gold should not breakdown under the $137 confluence level of the 50d EMA, lower daily Bollinger Band, and horizontal support level unless something went terribly wrong.

Otherwise, the $139 level is the upper pivot that would flash a caution sign should GLD breakdown under $139 soon.

Barring those ‘bearish’ or ‘non-confirmation’ developments, GLD and Gold appear poised to push for another try at lifetime highs again.

It’s been puzzling that Gold can’t impulse powerfully higher as it breaks to new high territory, but that’s just part of the current chart-scape we need to watch closely and without blind bullish (or bearish) bias.

The $141 level in GLD is the breakout pivot – or alternately short-term “Triple Top” pattern of tests outside, and rejections beyond, the upper Bollinger Band.

I’d like to see volume a bit higher given the ETF is at new highs but that’s yet another sign of caution to monitor that should prevent rampant, unchecked bullishness at this very moment.

Here’s the simple chart picture for Gold itself:

Without getting into too much detail, the daily “Band of Support” rests between $1,400 (a very obvious level) and $1,420.

The minor $20 band above that is where we are now – $1,440 to $1,420.

Any move soon under $1,420 (20 day EMA and band of support) is a caution/warning sign, and anything back under $1,400 for more than a day or so is a very big warning sign.

Note the long lower shadows of ‘rejection’ or buying tails in mid-March under $1,400 – a bear trap.  Always monitor real-time developments when price breaks a critical support (or resistance) area for anything suspicious or out of place.

Big buying tails (lower shadows) at the 50d EMA is indeed suspicious and as you can see, the minor break was just a mean Bear Trap that resulted in a push to new highs.

Keep these levels – particularly the Daily Band – in mind as you position or trade into Gold and GLD.

Written By Corey Rosenbloom, CMT From Afraid To Trade  

My name is Corey Rosenbloom, CMT (Chartered Market Technician) trader, educator, analyst, and I am excited to share with you my experiences studying and trading the markets and to hear from you regarding your experiences, challenges, and frustrations, and successes. My goal is to create a community dedicated to reaching out to those who have been burned by the market or are anxious about risking their money to make money in the stock, options, or futures markets. Together, we can share strategies and learn how to overcome crippling fears that keep us from achieving our highest potential.

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