Gold Price Rally Pushes RSI Indicator Into Overbought Territory. The WGS-N closes above the 200 and 400 areas and begins to increase in support. As the market consolidates to a range between the indicators highs, it sets the stage for an eventual close above the 200 area.

Will the recent rally act as resolute resistance zone or breakout? The answer is yes and no.

Market consolidations are typically viewed as bullish for long-term investors. This rally, however, has the potential to make the market suffer a serious loss if the gap between the uptrend and the support level remains unchanged.

We already know that the market’s wedge market has lost its momentum. What can you do to protect yourself in this situation?

First, I’ll outline two ways to play out a triangle-shaped trade. Let’s say you buy the smaller triangle and sell the bigger triangle. In this case, you are entering into a triangle trade with a sell down (on the smaller triangle) and a long (on the bigger triangle).

The important thing to remember here is that your price moves down. In the longer term, your price will inevitably move up. Your entry will be a long, rather than a short trade. That’s because in a short trade, you may not be able to control the closing price, and it can move a considerable amount of distance before you open your position.

The triangle trade has a higher chance of remaining profitable when the market is in a big bull market. It can even be profitable when you have entered a trade and anticipate that the market is overbought.

With a big rally coming up, the support level on the upper arc of the triangle will break. This will prompt you to follow the resistance level on the lower arc of the triangle. You will be looking for a closing close of at least three points above your entry price.

It is very important that you find a very strong trade when in the market for your final entry. This means that you must remain disciplined about when you close your position.

There is one caveat that applies here. You must be willing to take risks if you want to continue making profits in this market.

Bulls don’t do well when the market is oversold. They are usually more successful when they hold a long trade. If you’re afraid of long-term losses, then you might want to begin to focus on a shorter trade and waiting until you see the support level for a potential breakout.

Stay alert to changes in the market. Before I make any money in this market, I always get a little bit of stock trading education first.