Outlook for WTI crude, gold and silver
WTI crude oil looks like it is completing an inverse head-and-shoulders for a buy signal. You can see this in the daily chart below.
Breaking above key resistance at $54.20/30 would be a buy signal. This would initially target $55.55/55.65 but there is a good chance we can reach $57.20/30, $57.50 and $57.90/58.10. Eventually we could climb as far as $59.20/40.
In the very short term, for intraday traders today there is a small channel with upper trendline resistance at $55.30/40. So a break above here should accelerate gains. If we fail here today we must hold the neckline to the head-and-shoulders at $54.30/20 for the pattern to remain relevant (at least on a weekly closing basis).
Gold started a rally in August and really built momentum from November, climbing from $1195 to $1298 in early January. After a three-week pause we broke higher again last week from a bull flag formation, to reach strong resistance at $1320/25. This is from an 18-month trendline and the green 500-week moving average, as you can see in the weekly chart below.
A break higher, confirmed with a weekly close above the resistance tomorrow night, would therefore be a strong medium-term buy signal. This would target $1334/35, $1340/41, $1345/46 and $1349/50.
Note how the moving averages on the daily chart are close to seeing a bullish golden cross from the purple 55-day moving average crossing above the green 500-day moving average. Not too far behind is the blue 100-day moving average approaching the red 200-day moving average at $1215.
If bulls decide to take profits, triggering a move to the downside, we are likely to test the previous highs at $1300/1298. Any further losses meet good support from the 23.6% Fibonacci at $1285/83.
The monthly silver chart below shows the price finally breaking above a 10-year trendline, after we topped exactly here at the start of the month.
Holding above the 10-year trendline at $15.80/90 targets 500-day and 100- and 200-week moving average resistance at $16.25/30. In overbought conditions, bears could try short positions with stops above $16.37. See the chart below.
A break higher is a huge longer-term buy signal, but I need to see a weekly close above for confirmation tomorrow.
Technical Analyst & Trader
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