GOLD - 1H BUY PROJECTION

Accumulation Phase

Selling Climax (SC) -

Selling Climax is a pattern in Accumulation phase characterized by a sharp selloff. It takes place before the Preliminary Support or PS. It indicates that selling pressure has reached a stage in which panic selling by the public will be absorbed by Big Institutional players or Smart money traders.

Automatic Rally (AR) -

An automatic Rally is an up move that forms after the Selling Climax in the Accumulation phase. The underlying buying interest causes the prices to rally higher, but quickly prices will fall back after making a new high. The highest point of this rally will become the Resistance of the Accumulation range. You can see the example of Automatic Rally or AR in the Image.

Secondary Test (ST) -

The Secondary Test formation happens after an Automatic Rally. It’s caused by the long covering process of Public Investors, which brings the price back to the area of Preliminary Support. Often prices will bounce back after touching the Preliminary Support indicating the presence of Buying Interest.

Springs -

Springs are nothing but shakeouts that happens within the Accumulation phase. The prices will fall below the Preliminary Support of the trading range only to reverse back above the trading range within a short time period. (Often referred to as False Breakout)

Springs are caused by Big Players to mislead the Public and acquire more shares at a lower price. It influences uninformed traders and investors to sell their shares at a lower price, as they expect a further fall in stock prices. You can see the example of Springs in the Image.

Sign of Strength (SOS) -

The Sign of Strength takes place after the Spring Pattern, indicating a bullish sentiment in the market.

Sign of Strength can form like a normal pullback or minor consolidation at the Resistance level of the Accumulation range. It’s a confirmation that Sellers have lost momentum and prices will continue to rise on the upside. Most of the time SOS looks like a breakout setup which is often followed by a sharp rally on the upside. Take a look at the Image to understand SOS
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