GDXJ Junior Gold Miners Daily and Weekly Charts; Positive Divergence in Play

The gold miners went on a ride. As you remember, Keystone posted the GDXJ and GDX charts to call the bottom as March began. The positive divergence was in play on the daily chart above along with the falling wedge and oversold conditions, and lower band violation, so it was set up to pop. At the time of the call, however, the weekly chart was referenced and the jury was out with its possie d. The stubborn MACD was hinting that it wants to pull price down again on the weekly basis. The GDX and GDXJ long trades were in play but you did not want to marry the trade (fully commit) since the weekly chart was a bit cloudy due to the MACD. Thus, play it long for the pending rally on the daily and git outta Dodge after you make a few bucks.

That worked nicely so the trade was exited as price made its way to to the 50-day MA. It never got there so price really needs to show respect to the 50 and the upper band that has not been touched this year. Note the death cross (black circle) and at the same time the 20-day MA crossed. You never see a confluence like that where 3 moving averages cross at the same nod. Coolio. Since that is so rare, remember that 52 level it is likely important.

So the long trades in GDX and GDXJ work out and are exited. It would be expected for price to then slump for a few days, after it tops out, but it is surprising to see price drop back down so fast. It is due to the dollar move not the chart technicals. Price prints a lower low and the daily chart is good for a rally again as the possie d shows (green lines). The weekly chart is also agreeable to a multi-week rally, however, you have to have respect for the VST minor weakness in the MACD and money flow. The MACD red line could be called flat and it is possie d over the last year. Money flow is also positively diverged over the last year which carries clout despite having a little negative slump last week due to the dollar.

The weekly chars shows a congestion zone at 41-47 from last year so price is deciding if it wants to play in that sandbox for a little while and it is currently hinting at no as the answer as price is perched at the top of that range. If 41-42 fails, the lower trend line, 37-38 would be on the table. A down move like this would be due to dollar volatility. The set-up was conducive to asking GDXJ for another dance and of course she wanted to oblige. Thus, the 2-hour chart was referenced for a potential long entry and if you bring that up, you can see Thursday noon time that 3 candlesticks had printed at the lows and all the indicators were possie d so Keystone was buying GDXJ on Thursday afternoon and Friday.

The possie d on the 2-hour conspires with the possie d on the daily to create the pop on Friday. The daily chart wants more upside so it may follow a path similar to the rally a couple  weeks ago. It was difficult to find any tickers desirable to play on the long side except for the gold miners. We shall see if lightning strikes twice for long GDXJ. Keystone is giving GDXJ a whirl on the long side but watching it closely. Will she dance rhythmically higher providing pleasure and joy, or, will she slap Keystone and toss a drink into his face? 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.

Note Added Wednesday, 4/7/21, at 7:00 AM EST: Beautiful rocket launch. It stutter-stepped for one day after the above post and then handed out the money on the possie d launch. In 4 days, 43.30 runs to 48.33, a +12% pop. Calling tops and bottoms is a beautiful thing. Don't get greedy.