Will Gold Glitter Again? Fibonacci and Elliott Wave!
Aug 17, 2021
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Gold has lost its shine over the past many months but will it glitter again?
Let us look at Fibonacci levels along with Elliott Wave pattern
Below is a short term Analysis of MCX gold using Elliott waves, Fibonacci levels and channeling techniques along with simple price action.
MCX gold daily chart (17 AUG 2021)
On the daily chart of MCX Gold futures current contract we can see that prices formed a morning star candlestick pattern on 11th August 2021 and closed inside the Bollinger Bands. The morning star is a bullish reversal pattern and a break above its high has resulted in a short term up move.
As per Elliott wave theory currently wave (z) is ongoing on the downside and its internal counts suggest that the current rally is only a counter trend move which is wave b. Prices have retraced almost 61.8% of wave a while having reverted to the mean of 20 SMA. In case if the correction gets deeper, we could see a move towards the 78.6% Fibonacci retracement near 47780 levels.
Traders can look for shorting opportunity if price action presents a reversal signal near the confluence of the channel resistance, the upper Bollinger bands and the 78.6% Fibonacci retracement levels.
Knowledge of wave theory helps in identifying trades with early entry and great risk reward trade setups while improving the accuracy of the overall trading system.
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