GDXJ Gold Junior Miners Daily Chart; W Pattern Bottom

The gold mining industry is experiencing consolidation. Last year, Barrick and Randgold got married and this year Newmont and Goldcorp tie the knot. GG was an ongoing long play of Keystone's; remember the chart a couple months ago? So it worked out. With this announcement by Newmont, obviously there will be more mergers and takeovers ahead in the gold mining arena. The junior's are ripe fruit. A larger older gold miner would love to enjoy the sweet young nubile nectar of a fast-growing junior. Alas, when you think you had a good idea, you look at the chart and see that investors have already been playing this game after the Barrick deal.

The W pattern bottom is a very strong bullish chart pattern. It gains even more strength if it forms completely under the 50 and 200-day MA's. As seen above, the W forms below the 200 but not quite the 50 so the assessment would be for a strong move higher. The base is at 26 and breakout line at 30. Once price broke-out higher, the target is 34 which happens to be strong price resistance from last spring. The bounce off the bottom is created by the positive divergence and oversold conditions.

Price came back for a gentle back kiss of the 200-day MA, see the shadow of that candlestick from a few days ago extending down just enough to lightly tap the 200. A more manly retest of the 200 may be on tap. Price also violated the upper band so the middle band at 29.80 is on the table.

A confluence forms at the 30 break-out line since the 200 is coming down to there. The 20-day MA (which is also the middle band) is coming up to there. Thus, this confluence acts as a magnet and price may come down to 30 for a retest. This would satisfy the weak and bleak money flow.

After the backing and filling, GDXJ shoiuld resume the uptrend and eventually fulfill the W pattern target to 34. On the GDXJ monthly chart, a textbook 2-leg bull flag is under development. The junior's jumped from 17.8 to 46.8 in 2016, that was a lot of happy gold bugs back then, which is 29 points. The sideways consolidation occurs during 2017 and 2018 forming the bull flag and if price is beginning the second long-term leg up from 26.5, that targets triple nickel's, 55.5, as the upside end game for the months ahead.

Price will need to stay above the 50-month MA support at 29.71. As long as GDXJ can hold this support, the upside is golden ahead. If GDXJ slips below 29.71 and starts printing closing numbers under this level, it may start puking its guts out. Keystone does not hold any position in GDXJ currently and will likely sell GG today taking profits. That GDXJ 29.7-29.9 area is interesting. Keystone may buy a long there if price comes down for a look and would maintain a tight mental stop. 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.