Traders enter in direction of the next breakout. The gold price is in an ascending triangle (lines 2 and 3). It was testing line 2 support (US$1 368) at the time of writing. However, it can break out in either direction. The stochastic oscillator (on top) is in its oversold region, which is typically a bullish sign. However, a clear breakdown of line 2 will lead to further selling off before gold’s next rally. While investors should still hold, traders are to enter in the direction of the next breakout. Therefore, a close below $1 355 will be a signal to sell short. But a close above $1 420 (line 3) will be a buy (long) signal. Do whichever happens first. The target for a short signal will be $1 270 at line 1 support (which coincides with its 200-day moving average, which provides further support). For a breakout to the upside look for a rally to $1 500 – ie, the height of the triangle projected up. For a breakdown, the stop-loss for a shorting will be a close above $1 372. For the buy signal the stop is a close below $1 405 (spot prices).