Technical Outlook & Trading Strategy:-
The price of Gold corrected sharply from the highs of Rs 22794 levels as on 22nd June, 2011 to hit a low of Rs 22035 levels on 27th June, 2011.
Since this sharp fall, the price of Gold has been trading in a narrow range of Rs 22175 to
Rs 22045 levels over the past few sessions.
But, the selling pressure witnessed during yesterday’s session took the price of gold below the lower end on this narrow trading range.
Since the short term momentum indicators are in oversold state we expect the price of gold to pullback from current levels and test its resistance placed between Rs 22000—Rs 22050 levels.
But, since the overall technical scenario remains weak we believe that any pullback towards these levels can be used by traders to open fresh short positions.
We advise Traders to sell between Rs 22000--Rs 22050 levels with a stop loss of Rs 22107 levels for downside targets of Rs 21950 / Rs 21890 levels.
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