On February 6 my view was that GDX (Gold Miniers ETF) had established a tradable bottom

(Post: GDX Gold Miners ETF Substantial Upside Potential)  http://goo.gl/s7GEXf

Weekly time frame:

  • The bullish scenario remains in play however the advance from the January low is extended.
  • GDX (Gold Miners ETF) has printed 4 consecutive weekly closes above the upper Bollinger Band, while it demonstrates a powerful move it also increases the odds of a pullback
  • The weekly Shooting Star is also aligned with the scenario of a pause/pullback
  • If the support at 17 does not hold we have two potential targets for the probable pullback: T1 = 16.24 (50 wma) and T2 = 15.60 ( October 2008 low and Rising 10 wma)
  • I expect the resumption of the up trend once this pullback is done
  • If T2 does not hold the bullish scenario would be seriously jeopardized

 

GDX WEEKLY CHART

 

Daily time frame:

  • We could make the case that GDX (Gold Miners ETF) has completed a Rising Wedge
  • If the Gap at 18.50 is closed a pullback should be underway
  • In the daily time frame we can specify  three potential targets for the potential pullback: Target Box 1 (20 dma, Gap 2 that can be filled and 0.382 retracement) = 17.50-17.00; Target 2 (0.5 retrecement) = 16.13 and Target Box 3 (200 dma, Gap 3 that can be filled, 0.618 retracement and 50 dma)
  • I would open a long position in DUST (Gold Miners 3 x Short ETF) if next Monday GDX (Gold Miners ETF) breaches the lower trend line of the assumed Rising Wedge

 

GDX DAILY CHART

 

  • The negative divergence of  RSI (14) is in agreement with the scenario of  a pullback. If this is the case the Stochastic should lose the 80 line.

 

GDX DAILY MOMENTUM

 

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