SGX: SPDR Gold (Stock Pick of Day - 14 Apr)

Was monitoring SPDR Gold Shares for the past few trading sessions. Noticed a suitable entry point to LONG for tomorrow. The stock is currently trading in a tight peak and trough range (Peak: 87.64 and Trough: 86.16). Two possible scenarios may happen: 1. Stock breaks trough (no position taken - await for another suitable entry for LONG) or 2. Stock breaks peak

Using Classical S3 entry, the K-line is currently touching the bullish volume bar, which indicates a possible reversal point. The rationale for this trade is as such, the stock is currently downtrending, which means that the chances of a trough breaking is much higher than a peak. Should the stock break the peak, this would indicate a change in sentiments and thus, a translation into a high probability trade.

One may ask why would we want to LONG a downtrending stock? - Answer: there is a possible rebound back to the downtrend line before the stock would resume its downtrend again; this is otherwise known as a Counter Trend strategy. If the above scenario comes into fruition, a lower high would be formed. For those who are acquainted with Technical Analysis, you would have notice the prices resting on 100-Day Moving Average for the past few trading sessions.

If you are interested in trading the counter, you may find it under POEMS CFD or DMA --> look for GLD 10 US$.