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Monday, March 19, 2007

US TECHS: Commodities Outlook; Gold and Oil

[Gold] remains within the triangle pattern that has formed during most of March, moving mainly within the measured retracements (38% to 62%) of 2006 range that extend from $640 to $660. Multiple time frame trend conditions are too mixed to have great confidence on what comes next, with dailies neutral, weeklies bearish and monthlies still bullish.

Trend Intensity, IFR's proprietary indicator, has been flat since losing its bullish trend signal at the end of February. Feb 20 and 27 floors at $659-60 are resistance, also marking 40-day moving averages. Mar 9 tops are just below $660 as well; look to sell on approach.

In [oil], a new bearish Trend Intensity signal was set on Friday, the first since a weak bullish trend was indicated at the end of February that quickly failed. Weekly trends will turn bearish this week below $59.90 Apr, and monthly trends have never lost their bearish bias.

Some follow-through selling has surfaced, though hourly chart studies show some bullish divergence potential that may dampen the downside in the short run. For the record (though well out of reach), daily resistance is effective in a broad band to either side of $58 Apr today. Weekly supports are near $55.50 Apr.

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