- The short trade from last week has hit the first target.
- Analyzing different ways we could adjust the position moving forward.
- How to use the OBV with a moving average effectively.
Last week Friday, we looked at a potential short trade in GC, and the position has worked out so far, with the first target being hit. The second target is still some way away, but let us look at some developments and see if there is anything we can do to adjust our position and increase our expectancy.
From here, there are a few things we need to note. Primarily yesterday’s candlestick pattern on the daily, which closed as a very small doji. This could lead to a morning start pattern, and being that it is forming within a support zone is not ideal for the bears.
The first target was already hit, however, so we are in a position where stops can be brought to break even or left alone. This is up to the trader. A break below recent lows at $1,812 is exactly what bears are looking for. This gives a relatively clear path to the second target but also gives us the option to begin trailing the stop above swing highs on shorter time frames.
OBV & moving average
I applied the OBV indicator (Blue) to the hourly chart with a moving average (Purple). A cross of the OBV below the moving average could be a signal that price is going to continue with its bearish momentum.