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Active Trader Breakout
Signals for Gold, Silver & Oil
by Chris Vermeulen
Gold, Silver and Oil breaks out to
new multi week highs and shows signs of more strength to come. The charts below
show both weekly and daily trading analysis pointing to higher prices for these
Weekly Gold ETF Trading
Gold closed on Friday at a 5 week
high, breaking above its resistance trend line on the weekly chart. Weekly chart
pattern breakouts carry much more momentum behind a move, than daily charts.
This chart of gold (GLD fund) clearly shows a weekly breakout in the price of
Also, I have drawn what appears to
be a very large reverse Head & Shoulders pattern. It is this pattern, which is
pointing to a much higher price for gold. The measured move for this pattern is
the distance from the Bottom (head) to the top (neckline), which is about $300
per ounce. If we see this chart break above the neckline over the next few
months, then most technical traders will be buying gold up to $1300 per ounce,
which would be the next major price target.
Weekly Gold ETF Trading – GLD ETF
Fund – Price of Gold
Daily Gold ETF Trading
The daily chart breaks down the
price action even more, allowing us to see the price movement for each day. This
chart looks to be very strong, generating a buy signal for gold.
The $HUI:GLD indicator shows gold
stocks are out performing the price of gold, which is very positive. The MACD
and stochastic indicators are currently on a buy signals as well. When we
combine these indicators with current price action, trend lines and risk
management, we can find low risk entry points for trading in and out of gold.
Daily Gold ETF Trading – GLD ETF
Fund – Price of Gold
Weekly Silver ETF Trading
Silver has much of the same price
action as gold. Both are considered a safe haven and seem poised to move higher
over the intermediate term. The weekly chart below shows silver breaking above
its resistance trend line and surging higher in price.
Sometimes I see silver as a leading
indicator for the price of gold. Gold only moved higher by 3.5% on Friday while
silver surged over 12%. I expect to see gold catch up over the next week as new
traders/investors see these clear breakouts.
Weekly ETF Trading – SLV ETF Fund –
Price of Silver
Daily Silver ETF Trading
The daily chart for silver looks
strong as well, but could be a little ahead of its self. We may see is pause for
a day or two before continuing its move higher.
Daily Silver ETF Trading – SLV ETF
Fund – Price of Silver
Crude Oil Trading
The last week in oil was exciting
with prices breaking out and starting to run higher. The cup & handle pattern
for oil can be seen best looking at the daily chart. The measured move for the
price of oil looks to be around the $75 level and then $85 after that. The cup &
handle pattern is one of most powerful bottoming patterns and I expect oil will
trade higher for some time.
Weekly Oil Trading – How to Trade
Oil (USO, USL) – Price of Oil
Daily Oil Trading
The daily chart shows a clear
picture of the cup & handle pattern. During this pattern, we have had two buy
signals. I like to wait for low risk entry points when risk is under 3% and
currently downside risk for trading oil at this level, is around 8%.
Waiting for low risk entry points
with clear exit points is critical for trading commodities. Every one can buy
gold, silver and oil but most don’t know when to cut losses, take profits or
when to add to a winning position. That is what I focus on when trading these
Daily Oil Trading – How to Trade Oil
(USO, USL) – Price of Oil
The commodities market has been
extra volatile the past 9 months making it difficult to have low risk setups. We
have been getting several buy signals but not as many setups to actually put
money to work because risk has been over 3%.
I think these commodities gold,
silver, and oil are poised for a nice move higher. I just want to mention I am
not a gold or silver bug always thinking they will rally to ridiculous prices
like $8000, which several forecasters are shouting out. I like to follow the
price one - two moves at a time then review the current situation.
That being said, with the global
economy not looking to hot, it puts gold and silver in a great situation.
Countries, and private investors and traders are accumulating precious metals,
as protection from falling currencies and will most likely continue doing this
for some time, which will continue to push gold and silver higher.
If the broad equities market rolls
over, I expect to see gold move higher with money moving into these safe havens.
So, I think the odds are good for prices to rise over the next 4-8 weeks.
Oil appears to be in a similar
situation. If oil prices continue to climb, I expect it will put a damper on the
equities market, which will help push gold and silver higher.
While I would like to see prices
move higher for all investment types, it’s important that traders and investors
protect themselves from substantial loses. I focus on following price action,
volume, momentum, risk management (Low Risk Setups), portfolio allocation and
some fundamental data, but in my opinion most fundaments have gone out the
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This article is
intended solely for information purposes. The opinions are those of the author
only. Please conduct further research and consult your financial advisor before
making any investment/trading decision. No responsibility can be accepted for
losses that may result as a consequence of trading on the basis of this