Gold: Strong Bullish Market Will Be Good for Selling

The price broke the previous market high and moved above 1558.00 resistance level. Thanks to fundamental reasons and news.

What does it mean for us? Should we buy and catch the uptrend?
No. Buying in the overbought markets is not a good idea. The market has opportunities to move higher, but long positions had to be opened below 1500.00 based on breakouts above the local downtrend line and SMA100. Also, we talked about buying based on the reversal from 1450.00 support.

Now, we should search for possible sell opportunities in order to catch a pullback. RSI moved above 80, and it confirms the oversold market conditions. Yes, MACD and DMI support the further upward movement and the strength of buyers. But the price moved above the upper Bollinger Band. It is just the question of time when the price moves back in the channel and SMA20.

As the market passed the strong resistance level, now we should use it as a support. It is the signal level for sellers. If the price reverses and moves lower, a breakout below 1558.00 should be used for selling. The market will have room for the downward movement, and sell trades should have a good risk/reward ratio.

If we talk about new buy opportunities, I would like to talk about them when the price reaches the zone between SMA20 and SMA100. Reversal signals will be good for buying in the direction of the main uptrend.