Gold continues to attract new buyers pushing prices higher. The daily chart below shows the strength of the trend dating back to 2008. Gold clearly continues to create higher highs and higher lows confirming our uptrend and bullish bias. Our previous low was established at $1,307.45 on Jan. 28, 2011. Bullish traders can continue to look for buying opportunities as the market continues to trade above the 1,300.00 figure.
Price Action
Taking price in to a 4hr chart, we can find congestion at the $1,400 level. This price has acted as a key area of resistance and has recently become support after price broke through on Feb. 21, 2011. Gold is trading lower this morning and entering levels where we can start looking for buying opportunities
Trading opportunity
As price closes in on support I will begin to look at buying opportunities on XAU/USD . My preference is to enter long over $1400 as close to support as possible. I am using CCI to confirm my entry and will be looking for a cross of the indicator back above -100 for my entry signal. Stops should be placed below the previous low of $1,380.85. Using a 1:2 Risk – Reward ratio, my profit target sites are set on $1,470 or higher.
