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Analysis | Commodity Technical Analysis | Written by HY Markets | Tue May 16 17 04:48 ET


Gold prices advanced this Monday beyond last week's highs, with spot peaking at $1,237.26 a troy ounce, but trimmed most of its daily gains to end the day barely higher at 1,231.00. Broad dollar's weakness was behind the early decline, but slipped on low physical demand and a bounce in the American currency. The daily chart shows that the price settled around a bearish 200 DMA after failing around the 100 DMA, whilst the 20 DMA maintains a strong bearish slope well above this last. In the same chart, technical indicators have lost upward strength and turned flat within bearish territory, suggesting the latest recovery was unsustainable and that the risk remains towards the downside. In the 4 hours chart, the 20 SMA heads higher below the current level, providing support at 1,226.60, while technical indicators turned lower within positive territory, not enough to confirm additional declines, but also limiting chances of a steeper recovery.

Support levels: 1.226.60 1,214.25 1,203.80

Resistance levels: 1,237.25 1,245.20 1,251.30


West Texas Intermediate crude oil futures closed the day at $48.79, its highest settlement for this May, boosted by comments from Saudi Arabia and Russia oil ministers, saying that they could extend their output cut deal until March 2018. The positive mood among oil traders, however, may quickly turn sour, if US data continue indicating rising production in the world's largest economy. From a technical point of view, the daily chart shows that the price advanced well above a still bearish 20 DMA, while technical indicators head north, albeit holding within their mid-lines. In the shorter term, and according to the 4 hours chart, the upward looks a bit more constructive, given that the Momentum indicator has bounced from its mid-line, while the RSI indicator also turned modestly higher after correcting overbought conditions, although both stand below previous highs. In the same chart, the 20 SMA is crossing above the 100 SMA, both around 48.00, providing now a strong support in the case of a downward move.

Support levels: 48.00 47.30 46.60

Resistance levels: 49.60 50.10 50.70


US indexes closed in the green, with the Dow Jones Industrial Average adding 85 points to end at 20,981.94, fueled by an advance in retail and energy-related equities. The Nasdaq Composite added 28 points, to 6,149.67, while the S&P added 0.48% and closed at 2,402.32, both hitting fresh intraday records. Equities shrugged off a negative manufacturing report released at the beginning of the day, taking the lead from an almost 3% advance in oil prices, on renewed hopes worldwide producers will keep on battling against the market's glut, and strong gains in cybersecurity companies. Within the Dow, Johnson & Johnson was the best performer by adding 2.72%, followed by Cisco Systems that advanced 2.33%. Verizon Communications led losers by shedding 1.03%, followed by Nike that closed 0.79% lower. The DJIA maintains a neutral stance in its daily chart, still hovering around a modestly bullish 20 SMA, and with technical indicators turning higher around their mid-lines. Shorter term, and according to the 4 hours chart, the index is also biased higher, holding well above its moving averages, although technical indicators lost their upward momentum within positive territory, indicating that an advance beyond 21,000 the daily high, is required to confirm further gains.

Support levels: 20,865 20,822 20,797

Resistance levels: 20,900 20,941 20,977


The FTSE 100 advanced 19 points to settle at a new record high of 7,454.37, bolstered by commodity-related equities and persistent weakness in the British Pound. Anglo American led gainers, adding 3.22%, followed by Glencore which added 3.16%. BHP Billiton closed 2.28% as oil prices rallied. TUI was the worst performer, shedding 4.79%, followed by Next that lost 1.86%. The benchmark advanced further in after-hours trading, supported by a strong advance in Wall Street and currently at 7,464. From a technical point of view, the daily chart shows that the RSI indicator heads north around 67, while the Momentum indicator diverges from the index, having retreated from overbought territory. In the same chart, the 20 and 100 SMAs converge heading north around 7,270. Shorter term, the 4 hours chart shows that the index keeps posting higher highs and higher lows, holding far above a sharply bullish 20 SMA, whilst the RSI indicator heads north around 82 as the Momentum losses upward strength between positive territory, somehow warning of a possible bearish corrective move for the upcoming sessions.

Support levels: 7,447 7,398 7,365

Resistance levels: 7,465 7,500 7,545


European major indexes closed with gains this Monday, with the German DAX peaking to a new record high of 12,839 intraday and settling at 12,807.04, up 36 points or 0.29% on the back of gains in the financial and utilities sectors, and a recovery in commodities prices. RWE AG was the best performer within the German benchmark, adding 3.84%, followed by Commerzbank that gained 3.04%. Fresenius Medical Care led decliners, shedding 1.10%, followed by Merck that closed 1.07% lower. Heading into the Asian opening a few points above the mentioned close, the daily chart shows that the index advanced further above strongly bullish moving averages, as the RSI heads marginally higher around 71, but the Momentum indicator turned sharply lower within positive territory, diverging lower and favoring a downward corrective move for the upcoming session. In the 4 hours chart, intraday declines met buying interest around a bullish 20 SMA, this last now at 12,755, while technical indicators lack directional strength, but hold within positive territory.

Support levels: 12,801 12,755 12,718

Resistance levels: 12,839 12,870 12,920

HY Markets


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