A reversal can be powerful. Two are often a game-changer. We just saw three.
Reversal pattern confirmed
On Wednesday, I wrote the following:
The momentum remains positive, so reaching this target – close to $1,965 – might be what triggers the reversal.
The reversal is likely anyway because the fact that both resistance lines cross creates a triangle-vertex-based reversal point. And it is due right about now.
Consequently, we might see some very interesting action in the upcoming days – with gold likely reversing its course, but quite likely from slightly higher price levels.
On the chart below, it’s clearly visible that gold did indeed move to the above-mentioned combination of resistance levels.
And on the chart below, you can see that it also reversed.
The reversal was clear, and if we want to be precise, gold moved slightly above the resistance line and then invalidated this tiny breakdown, which made the reversal even more bearish!
Besides, gold was not the only part of the precious metals sector that reversed in a profound manner. We saw the same things in silver and mining stocks.
Reinforced bearish implications
The gravestone doji candlesticks are a form of an intraday reversal, which is likely to be followed by lower prices.
Since we saw not one but three of such reversals, the overall bearish implications are much stronger than if we just saw one. This further reinforces the scenario that I featured previously – namely, the precious metals sector corrected after the bullish reversal, but it wasn’t likely to correct substantially before turning south once again. What we just saw is a confirmation that the move lower is about to start. It’s not yet too late to position oneself to benefit from it, but it might soon be.
Want free follow-ups to the above article and details not available to 99%+ investors? Sign up to our free newsletter today!
All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' employees and associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.