Negative Momentum Gathers Pace
The COMEX Gold extended its correction yesterday, falling USD6.90 to close at USD1,724.80. It started yesterday’s session at USD1,731.30 and climbed to the day’s high of USD1,742.20. However, strong selling pressure stopped the commodity from moving higher, and dragged it to the day’s low of USD1,721.60 before the close. The latest long upper shadow showed that the bears are still overpowering the bulls and remain dominant. With negative momentum now accelerating – as evidenced by the RSI trending lower – the commodity should see follow-through price action and retrace towards the USD1,710 immediate support level. Any attempt to stage a rebound would face strong resistance at USD1,751.70. For now, as the correction is still in play, we keep our bearish bias. Traders are recommended to retain the short positions initiated at USD1,813.50 or the close of 14 Jun. For trading-risk management, the trailing stop is placed at USD1,770. The immediate support remains at USD1,710, followed by USD1,680. Meanwhile, the immediate resistance is moved to USD1,751.70, followed by USD1,770.
A Pullback For Consolidation
The E-Mini Dow experienced a second consecutive session of profit-taking, retreating 174 pts to close at 30,966 pts. It began Tuesday’s session at 31,177 pts. The index initially bounced to the day’s 31,328-pt high, but momentum weakened, and it fell to the session’s low of 30,828 pts before the close. Despite the negative price action, the index managed to stay above the 30,585-pt support level. As mentioned in our previous note, as long as the immediate support remains intact, the counter-trend rebound will be deemed valid, and the index should resume upside movement post consolidation. In the next session, it may consolidate sideways above the support level until momentum picks up again. We hold on to our bullish bias until the stop-loss is triggered. Traders should keep the long positions initiated at 31,487 pts (24 Jun’s close). To mitigate downside risks, the initial stop-loss is fixed at 30,585 pts, which is the nearest support level. The immediate support is seen at 30,585 pts – 20 May’s low – followed by 29,800 pts or the low of 17 Jun. Meanwhile, the immediate resistance stays at 31,867 pts – 28 Jun’s high – followed by 32,491 pts or 2 Jun’s low.
Falling Below USD100
The WTI Crude’s bearish momentum gained strength yesterday, as the commodity plummeted USD8.25 to close at USD95.84 – a level last seen on 12 Apr. It started the session on a cautious tone, gapping down to open at USD103.46. It then moved lower throughout the session, breaching below USD100 to hit the session’s low of USD95.35 before the close. The long bearish candlestick reaffirmed that the bears remain in control, and the bearish structure is intact. With the renewed negative momentum, the commodity should drift lower towards USD92.93, followed by the USD87.50 support. Meanwhile, as the RSI is below the 50% threshold, we think it is unlikely that there will be a rebound to test the overhead resistance in the near term. For now, we retain our bearish bias. We recommend traders stick with the short positions initiated at USD115.31 or the close of 15 Jun. To manage trading risks, the trailing-stop is revised to USD108 from USD114.05. The immediate support has been moved to USD92.93 – 11 Apr’s low – followed by USD87.50. Conversely, the immediate resistance is shifted to USD105.24 – 8 Jul’s high – while the higher resistance is pegged at USD108.