• 26 mins The Top Tech Stocks Of The Year
  • 15 hours America’s Workforce Elderly Workforce To Double By 2028
  • 21 hours Toyota Tests Solar-Powered Prius
  • 2 days Why The Gold Rally Flatlined
  • 2 days The Uranium Sector Can’t Catch A Break
  • 3 days Upcoming Fed Meeting Has Investors On Edge
  • 3 days Global Gold Sector Outlines Responsible Mining Principles
  • 4 days China’s Giant Vampire Fund Loses $120B
  • 4 days McDonalds To Roll Out Robot Drive-Thru Clerks
  • 4 days Savvy Investors Are Betting Big On This Little Data Company
  • 5 days How The Government Is Wasting Tax Money This Year
  • 5 days Supply Concerns Halt Expansion On Tianqi Lithium Plant
  • 5 days The World’s Biggest IPO Is Almost Here
  • 6 days The Relatively Of Money And Happiness
  • 6 days Wall Street Unfazed By Recession Fears
  • 6 days SoftBank Urges WeWork To Pause IPO Plans
  • 7 days Anti-Aging Market To Hit $55 Billion
  • 7 days JPM, Morgan Stanley Take Advisory Roles In Aramco IPO
  • 7 days Are Bonds In A Bubble?
  • 8 days The Unknown Media Giant Taking The World By Storm
Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

  1. Home
  2. Markets
  3. Other

Gold Miners Holding Gains in Bullish Fashion

We published a video update a few days ago discussing the short-term outlook for the precious metals sector which includes the gold miners. With regards to the miners, we took the view that they could digest recent gains and hold support or break lower and trade close to the support near summer lows. After this week and today especially, one scenario is more likely.

We plot the daily candle charts of GDXJ and GDX below. There are numerous bullish points to make. First, the miners tested and held above support in each of the past five days. That culminated with a strong intraday reversal today (Friday). Second, the miners held above their 38% retracements which indicates they are holding most of their recent gains. Third, the miners will close today above their late August peaks. Fourth, the miners have held gains in the face of a very strong US Dollar.

Market Vectors Gold Miners and Junior Gold Miners Daily Chart 1

The miners have formed potential cup and handle patterns with the handle depicted in yellow (above). The potential upside targets are $27-$28 for GDXJ and $20-$21 for GDX. These targets are possible and would become probable should the miners break above their 200-day moving averages at $17.82 for GDX and $23.52 for GDXJ.

The next chart is a long-term look that includes the very significant 400-day moving averages. The aforementioned potential cup and handle targets nearly equate to the 400-day moving averages which need to be breached before a bull market can be declared. The 400-day moving average contained GDXJ's peak in 2014 and GDX's peaks in 2014 and 2015.

Market Vectors Gold Miners and Junior Gold Miners Daily Chart 2

The miners' holding of support for five consecutive days in the face of a surging US$ and a lack of strength in metals prices has increased the odds of the bullish scenario playing out. After enduring a devastating bear market the miners should be ripe for a recovery at some point. Need we mention that the gold stocks have been in their worst bear market ever and second longest? Need we mention that senior miners have been in a bear market for almost five years while junior miners have been in a bear market for four and a half years? The near term outlook looks bullish and if that plays out one would have to think a major long-term turn was at hand.

 


As we navigate the end of this bear market, consider learning more about our premium service including our favorite junior miners which we expect to outperform into 2016.

 

Back to homepage

Leave a comment

Leave a comment