Daily Forecast - 22 January 2015
Gold February Contract
Gold February is worryingly overbought now & it does look like we ended the rally yesterday. We got close enough to the measured target for the inverse head & shoulders pattern & as stated yesterday, the 100 week moving average at 1308 should mark a high for the week. Profit taking expected today to relive overbought conditions. Holding below 1297 should trigger a move down to 1286/1285. Below here targets very good support at 1275/1274. This could hold the downside today but be aware there is stronger support at 1266/1265. It should be worth buying into longs here with a stop below 1260. A break lower meets support from the 200 day moving average at 1256/1254. Try longs here with a stop below 1248.
Above 1297/1298 targets 1303 then strong resistance at 1307/1308. Again, it should be worth trying shorts with a stop above 1313. However be ready to go with an unexpected break higher using 3008/1307 as support, for a move up to 1313 then 1319 and perhaps as far as 1322/1324.
Nat GasFebruary contract
Natural Gas February now making a break above 3000 for a selling opportunity at 3055/60 with stops above the gap at 3080. Be ready to go with an unexpected break higher however using 3055/60 as support to target resistance at 3125/30. On any further gains look for a selling opportunity at 3200/3220 with stops above 3245/50.
Failure to hold above support at 3000/2990 however keeps the market under pressure to re-target 2875/65. A break below here today then targets this week's low at 2835/25. If this does not hold the downside we should retest last week's low at 2783. Obviously this is important this week but be ready to go with a break lower in the longer term bear trend to target 2760/55 then 2720/15.
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