Saturday, February 11, 2017

GDX Gold Miners ETF Weekly Chart; Fibonacci Retracements; GDX Prints Eight Consecutive Up Weeks

GDX prints a rare occurrence of eight up weeks in a row. The US dollar index drops so gold pops. The red rising wedge, overbot conditions and neggie d (red lines) signaled the spank down on tap in August, which occurs. For the Fibonacci retracements for the rally move from 13 to 32 (not shown), price bounced in December off the 62% Fib. The Fibonacci retracements are shown in purple for the move down from 32 to 18.5. Price stutters now exactly at the 50% Fib retracement at 25.15-25.30.

The indicators have more long and strong juice available (green lines) although the money flow is negatively diverging. With 8 up weeks, GDX is due for a pull back. Price violated the lower standard deviation band in early November so it then went to the middle band and now is in the neighborhood of the upper band and will likely touch helped by the long and strong juice.

The brown line shows horizontal price resistance also a gap fill. There is another gap fill needed above at 29.5-30.0. The upper standard deviation band is at 26.47. The 62% Fib retracement is 26.75 (note that Keystone annotated the purple Fib lines backwards; the numbers are the same but as price rallies from December, the 38% Fib is the 23.57, the 50% Fib is 25.15 as shown and the 62% Fib is the 26.75).

GDX has 8 weeks of upside momo on its side so it is hard to stop something like that. Price likely wants to visit the confluence at 26-27. The 50-week MA at 24.28, and moving higher, serves as support. So bulls win above 26-27. Gold bears win below 24.50-25.15. Price may continue higher but it will likely be more sideways involved. If you enjoyed the rally, you may consider starting to scale out next week. There is no trade here since the upside may be a few percent but the risk is not attractive. A pull back to the 50 MA at 24.28 may provide a buying opportunity. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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