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XME (Metal and Mining ETF): Early Stage of an Upward Trend?

Monthly time frame:

  • XME (Metals and Mining ETF) has been annihilated with a loss of 88% from the 2008 top (Underpriced mining stocks?)
  • If it is capable of remaining above the 2008 low then odds should favor probably a large countertrend rebound

XME Metal and Mining ETF Monthly Chart
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  • In order to achieve a large rebound XME (Metals and Mining ETF) must reclaim the 10 mma by the end of month print
  • The next "macro" target would be to reclaim the declining 20 wma and the 0.382 retracement of the decline from the August 2014 high located at 23.93
  • If the above were to be achieved then the trend line from the 2011 high could come into play

XME Metal and Mining ETF Monthly Zoom Chart
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Weekly time frame:

  • Obviously the long-term trend is down but we have two positive signs: Price has breached the trend line from the August 2014 high and it has reclaimed the 20 wma
  • If XME (Metals and Mining ETF) is pursuing something more than an oversold rebound (0.382 retracement and trend line from the 2001 high) it must remain above the 2008 low = 17 and reclaim the declining 50 wma which today stands at 20.20

XME Metal and Mining ETF Weekly Chart
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  • The rally from the January low has been impressive, especially this week's vertical move
  • The next resistance is located at 20.17 (horizontal resistance and declining 50 wma)
  • Before attempting to reach the mentioned resistance odds should favor some type of consolidation. If this is the case XME (Metals and Mining ETF) should remain above the 2008 low (17.09)
  • If the weekly gap at 16 were to be closed then the bounce could be over

XME Metal and Mining ETF Weekly Zoom Chart
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Daily time frame:

  • Another positive sign is that XME is now well above the 50 dma, which now has a positive slope
  • Now the issue is how it will deal with the hurdle of the 200 dma. The ideal scenario would be a pullback at support located at 17 before launching another leg up aiming at the next target located at 20.20 ish

XME Metal and Mining ETF Daily Chart
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  • The MACD bullish cross and the recovery of the zero line is a positive sign but for the shorter-term time frame with the RSI (14) is at an ATH

XME Metal and Mining ETF Daily Momentum Chart
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  • Given the extremes of the daily oscillators odds should favor some type of consolidation / pullback. The prior two pullbacks found the support at the black trend line and the 10 dma, now there is no reference close by. I guess that we have to wait and see.

XME Metal and Mining ETF Daily Zoom Chart
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I provide Technical and Elliott Wave analysis of different asset classes: Stocks, Equity Indices, Fixed Income, Currencies and Commodities at the website: http://www.thewavetrading.com/

 

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