We’ve been monitoring short-term triangles in all markets, and we’re seeing both Gold and Crude Oil break through falling trendlines, triggering a buy signal.
Let’s zoom-in on these breakouts and plot the future from here:
First, be sure to reference last Friday’s post “A Breakout is Near for Crude Oil” (today’s the breakout).
The trigger-break yesterday into the $45.00 per barrel level set the stage for today’s impulsive rally into $47.00.
We can expect range expansion (impulse, trend move) to follow range compression and that’s what’s happening.
If price continues on the upside pathway, it could trade all the way toward the beginning of the pattern near $49.00.
Note the bullish upside price pathway higher.
However, trade management is active management, and any round number on the way up could be a target price.
The same picture is taking place in Gold with this morning’s bullish breakout:
Gold’s Triangle Pattern is larger and wider than Oil’s.
The key pivot support is $1,100 per ounce and buyers defended this level with a positive divergence.
Buyers were strong enough this morning to trigger a breakout event beyond the $1,110 level or the falling upper trendline.
While Crude Oil’s triangle is smaller, we’ll be aware of possible higher upside price action in Gold.
We’ll need the price to stay above the $1,110 level and especially $1,100 for a reversal of the downtrend.
Note the breakouts and continue to watch upside “round number” targets like $1,150 and be on guard for any sudden reversals.
For more daily updates from Corey, visit his blog at Afraid to Trade.com.