Risk-to-Reward Ratio Makes Precious Metals the Choice for Uncertain Times
The recent volatility has brought about uncertainty for traders, but technical analysis reveals precious metals present attractive buy opportunities.
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In investing or stock trading, you need to have a contingency plan in place for times when things don’t quite go according to plan. Volatility is one of those factors that can bring about uncertainty. There has been volatility recently, and this has brought uncertainty to investors and traders. And in this volatile situation, investors look to precious metals. Common Behavior for $GLTR with Potential Buy Opportunity As a result of the pullbacks happening all over the market, some of the traders seem to hold the view that this selling pressure could continue all the way into summer. Taking a look at the chart of the ETFS Physical Precious Metals Basket Shares ($GLTR) from StockCharts.com, mentioned in Investopedia, the price could have reacted to a nearby resistance level and is retracing its way towards its 200-day moving average support.
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Analyst Casey Murphy considers this to be common behavior, and that experienced traders wouldn’t be surprised by it. Murphy believes traders can consider this as an opportunity to buy since a higher bounce and then a break extending further than the upper resistance could cause some of them to get their targets readjusted to $69.50. That would be equivalent to the upper resistance along with the pattern height. Since the risk-to-reward ratios are well-defined in this segment, Murphy believes this is worth watching for. Gold Could See a Price Rise Let’s look at gold with the chart of SPDR Gold Shares ($GLD) from StockCharts.com, and mentioned in Investopedia.
Pullbacks toward the short-term trendlines or the 50-day moving average support have usually given traders quite attractive risk/reward situations this far in 2018, and you can see that in the above chart. The pullback that occurred recently toward www.tradezero.co
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the 200-day moving average support can be taken as a major buying opportunity. The market volatility that we’ve seen now could be the factor that gets the prices higher during the short term. For active traders, they’ll be looking to see a bounce toward resistance and the following breakout. That could bring about target prices in the region of $132 or even more. Silver Has a Bullish Indication Silver usually lags behind gold, platinum and other precious metals in pricing. But looking at the iShares Silver Trust ($SLV) chart by StockCharts.com, you find a jump recently towards the dotted trendline.
This is indicative that silver prices could not be lagging anymore. A break that’s beyond the dotted trendline is a technical indication of a reversal of trend. The crossover you find between the MACD and the signal line is a bullish indication,
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and it could be just what the active traders have been looking for. Multiple consecutive closes above could lead to other precious metals moving higher. To conclude, market volatility coupled with cross-market sell-offs has led to investors getting concerned that there aren’t many options to invest their capital. Precious metals could be among those few options since, while they have gone through sell-offs in the past sessions, the pullbacks are providing attractive risk-toreward ratios and they look set to move significantly higher.
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