Today, we were looking for a reversal in Gold, potentially the start of a significant shift, after Gold gapped up. The 15-minute and hourly charts were showing signs of being overbought, and the 5-minute chart formed a double-top formation. The low of the opening 5-minute bar was addressed on the pullback exactly at 62.80, and a short inverted cup and handle had formed by one hour into the market. The trade call was a short under 62.80 with a stop over 63.22 which triggered on the break of the line on the chart at A:
Double Top
This led to up to a 2-point winning move in the GDX with almost no risk at any point. We look to potentially keep a piece of the trade into tomorrow’s action, having locked in a nice profit on a piece of the trade and having virtually no risk (except in the case of an even bigger gap up tomorrow). Have a look at the ETF service for more general index plays such as this one.