Chart of the Day - Gold to Resume Upside Rally

Gold

The precious metal for about 3 trading weeks was trading within the range of resistance $1290 and support $1266.62 per ounce. Political uncertainty in the US as a result of passage of the Tax bill in the Senate, North Korea tension (refusal to negotiate) contributed to the sharp decline in Dollar in the last trading day of the week 17^th November, 2018. 

The sharp decline in Dollar index saw Gold sharply rallied past resistance $1290 to reach a high of $1296.49 testing critical resistance. The precious metal ended the trading day slightly below the critical resistance $1296.49 to close at $1293.77.

Looking at the weekly chart below, Gold is currently trading within 61.8% and 50% Fibonacci retracement levels of high $1357.29 and low $1204.65

 

On a lower timeframe using 1hr chart, we see a throwback in the trend as price as retrace to test the moving averages fast and slow while the RSI 14 hour period also retraced from the overbought level to currently trade at 62 (still in the bullish zone)

 

Sentiment

Gold remain bullish with a more valid confirmation when price closes above $1296 critical resistance on the daily candle. A daily close above $1296 would likely see the precious metal rally towards $1305 resistance on the other hand; a rally below $1290 would see the Gold trend back into a range with $1266 as key support

Recommendation:

Long with stoploss at $1275 and Take Profit 1 @ 1305 (next resistance) and $1322 (intermediate resistance)

Nigerian Stock Exchange All Share Index Outlook for September 2017

The NSE All Share Index ended the trading month of August on a bearish note with 0.96% decline with YTD stand at 32.11% appreciation  

Trend Analysis

The bullish rally in the NSE All Share index which started in the month of March 2017 continued into the month of July as investors during these periods showed high level of bargaining interest. The bullish forces saw key resistance levels breached to the upside, first was the intermediate resistance of 31,073.30 (seen in June 2016) and later 35,843.40 which was marginally breached in the month of July 2017.

The month of August 2017 saw a further rally in the index to a high of 38,241.7 during the trading month but failed to sustain the momentum as such we saw the index closed below support turned resistance at 37,108.3 with the supply side overpowering the buying side of the market. 

Volume analysis showed traded volume increase consistently from the march 2017 up until June 2017 after which traded volume subsided in the month July despite the bullish close of the index.

Oscillator indicator – RSI 14 month period has thus rallied to the overbought territory and presently in a corrective wave. It stands at 64 

Breath analysis showed negative sentiment as 41 stocks closed negative compared to 35 stocks that ended the month positive.

 

Source: Amibroker Monthly Chart

Price Pattern:  the month of August closed with a reversal pattern (Inverted hammer – shooting star) 

Historically, September has average a negative month for the index, and the coming month is no exception as technical patterns has indicated an impending downtrend.

Expectations

Equities traded on the floor of the Nigerian Stock exchange would most likely witness fall in market value in the coming month as technical indicators had signaled a selloff