Finweek English Edition - - COMPANIES & MARKETS -

Traders hold with a tight stop for more short-term up­side. The US dol­lar gold price re­cently broke out of a side­ways con­sol­i­da­tion in the form of a broad­en­ing for­ma­tion (lines 1 and 2). This pat­tern is point­ing to more up­side to come over the short term. The min­i­mum tar­get is $1 633, mea­sured as the height of the broad­en­ing for­ma­tion pro­jected up. (It was at $1 602 at the time writ­ing.) The only short-term concern is that the sto­chas­tic os­cil­la­tor (on top) is in the over­bought zone. (How­ever, the long-term pic­ture is still bullish.) As a re­sult, traders keep hold­ing. But start to tighten your trail­ing stop to pro­tect short-term prof­its. Place your stop as a close be­low $1 560 (spot price). Once the gold price is above $1 620 then raise that stop to a break­ing of the low of its past two days. Start tak­ing short-term prof­its above $1 630 and then nar­row that trail­ing stop fur­ther to a break­ing of its prior one-day low to al­low for cap­tur­ing any fur­ther up­side.

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