Geojit Comtrade`s trading strategy on Gold

Geojit Comtrade has come out with its trading strategies on Gold.

The divergence in oscillators discussed yesterday, triggered a sharp rise but prices have remained capped in the congestion range of 1752-1764 levels. The broad consolidation witnessing inside the rising trend channel, since starting of the month, has nearing towards the upside obstacle of 1770. Structurally, the formation looks positive, hence we retain our bullish prospective towards 1770 initially followed by 1800/1840 but it has mandatory to breach the immediate upside consolidation blockage of 1752-1764, else the trend could remain choppy and call for corrective selling pressure. However, convincing violation below 1702 is required to pave the way for further strong selling pressures that we less anticipated on a short term. As per indicators, RSI still at neutral but divergence in oscillators displays underlying positive bias in the counter.

Spot gold rallied more than one percent, the highest in more than two weeks after Euro zone finance ministers agreed a 130 billion Euro rescue for Greece. Gold has also benefited from news that China recently cut its required reserve ratio and committed to help the Euro zone.

Trading strategies:

Key levels for the day: Downside: Immediate 1742/1715/1702-1700

Upside: 1764-1770 then 1800/1840

Buy on dips to 1725 target 1751 SL below 1715. Buy on dips to 1742 target 1754 SL 1728

Buy above 1752 target 1770. Buy above 1772 target 1800. Buy above 1804 target 1840

Buy near 1702 target 1737 SL below 1698.

Sell if unable to break 1764 target 1725 SL 1772 (risky)

Sell below 1700 target 1680/1660 SL above 1724.

Confirm selling below 1660 target 1642/1625 SL 1690. Downside turn around point is at 1660.

Prices have room for more upside, but an immediate dip favours followed by a brief consolidation and trigger fresh short covering rallies.

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