Page 10 - VP-MARCH 2016 final8
P. 10
GOLD STRUCK rally is nearing an end. The convergence of directional threads
within ADX is an ideal situation to go short with relatively low
CMP: ` 29800 risk. Another point is that of the crucial trend line resistance of
current channel on monthly chart which successfully stopped
Sell on rise: ` 29800-30000 prices from taking a monthly close above resistance line at
$1250. On fundamental level, things are slowly moving in favor
Target Price : ` 29100-28000 of world economy. A rebound in equity markets of India and
China will provide the much needed relief to world economy.
Stop-Loss: > ` 30160 An expected production cut in crude oil in next 2-3 months can
further hamper uptrend in Gold. Of course, there definitely
After a strong rally of 20% in last two months, Gold can be a plan-B in case all these technical and fundamental
has now reached crossroads, a price war which assumptions go wrong but that would only work out on a
only the toughest (traders) will survive and pave breakout above recent high of $1263. A buy above breakout
the way for either an extension of the current rally of $1263 will need high risk appetite. So, presently the best
or for returning back to the primary bearish trend. strategy with an early bird view is that of going short in Gold as
Technically, a very dilemmatic but interesting it posses less risk.
situation is slowly unfolding itself on chart. This is
one of those rare situations when all the advance We recommend selling Gold April contract at CMP Rs 29800
theories of technical analysis call for a very and on rise to Rs 30000 for targets in the range of Rs 29100-
defensive approach and definitely not for a decisive 28000. Maintain stop loss above Rs 30160.
one. However, no such theories work for early birds
as they believe in finding a trading opportunity right 10 ARIHANT CAPITAL ¡ MARCH 2016
at its dawn. ‘Go to the basics’ is their mantra…
Call it a gut feeling or an opportunistic trading
or a price action based strategy, it stands on solid
legs when I conclude that this is the right time to
go short in yellow metal. Going through the basics
like trend line resistances and exciting momentum
indicator like ADX, it seems that the current relief
