Trade of the week: long gold
We'd like to use the recent 8% drop in the gold price to enter the long-term trend by going long at $2,594.00 with a stop loss below the $2,470.00 late August low and an upside target of between $2,700.00-to-$2,800.00 and above.
(Partial video transcript)
Previous trading outcomes
Hello and welcome to this week's "Trade of the week" on Monday, the 18th of November 2024. Over a month ago, we went short New York cotton front month futures contracts. And, basically you can see here we did so at 72.69 and had to wait for a long time with the cotton price going against us. But because we had our stops above the previous highs, we didn't get stopped out. And now finally, we've hit our downside target, or nearly our downside target here, which was at 68.50. So we can cash in our profits on this trade now because we're very close to our target.
And then, what we also did is that, we went short at the beginning of November WTI, so Brent crude oil futures. You can see here we did so around 71.50. And since then we've come off nicely and hit our downside target as well. So we can get out of this trade now at 67.00. And we cash in our profits here.
And then last week we decided to go long USD/JPY. And you can see here that that trade also worked out fine. We went long here at ¥150.37. If you haven't cashed in your profits yet, around ¥156.40 or so, you can move your stop loss level to your break even level, meaning to your entry level, whereby if the market were to point down again, we would not be stopped up with a loss. We would just be flat on this trade. So that one, you can still let run. The upside target still around the ¥160.00 area. So that one is, is still there.
This week's trading opportunity
Which brings me to this week's "Trade of the week". And the gold price, as you can see, has come off by 8% over the last 2 or 3 weeks and is now starting to point up again. And it looks to me as if we could at least short-term see a bounce back towards the long-term uptrend line which has been broken through, which might now, in the future, act as resistance.
But, I believe that perhaps we can also just stabilise in this area and perhaps sideways trade. So from that point of view, from a technical perspective, we might also see here an ABC correction. And therefore we could reintegrate the previous uptrend, which is why I would like to go long here.
This week's "Trade of the week" is to go long gold and do so on current levels with a stop loss below the late August low, around $2,470.00 and an upside target probably around $2,800.00 even higher up, but perhaps also $2,700.00 in the meantime.
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