• 5 hours Gold Is Beating Buffett’s Berkshire Hathaway
  • 8 hours What’s Behind The Silver Sell-Off?
  • 11 hours The Retail Apocalypse Is Accelerating
  • 14 hours The Top Tech Stocks Of The Year
  • 1 day America’s Workforce Elderly Workforce To Double By 2028
  • 1 day 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
  • 5 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
  • 6 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
  • 7 days SoftBank Urges WeWork To Pause IPO Plans
  • 7 days Anti-Aging Market To Hit $55 Billion
Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

  1. Home
  2. Markets
  3. Other

Gold Stocks Retreat at Resistance

Over the past two weeks gold stocks have surged more than 20% as the awful jobs report forced the bears to capitulate. That strong of a move in a brief amount of time will naturally slow or correct. Furthermore, gold stocks touched resistance Friday morning which led to a bearish reversal. While the bullish trend remains intact, the odds favor lower prices in the days ahead.

The weekly chart below shows that GDX ticked resistance near $27 yet will close off the highs of the week. That is not a surprise considering the market tested resistance amid a very overbought condition. It was unlikely to crack resistance on the first try.

VanEck Vectors Gold Miners Weekly Chart

We zoom in on the short term by looking at daily candle charts for both GDX (bottom) and GDXJ. The miners pushed to higher highs but formed a bearish reversal on Friday. I expect Wednesday's gap to fill and the miners to potentially test last Friday's opening prices (GDXJ $36 and GDX $24). We sketch how the correction could evolve with the presumption of a bullish outcome.

VanEck Vectors Gold Miners and Junior Gold Miners Daily Chart

Buying opportunities within this sector have been few and far between and that could remain the case for the time being. However, if the miners correct here as expected then we should get a minor buying opportunity in the days ahead. If GDXJ tests $37 that would mark a 10% decline. Buying +10% weakness has been a profitable, lower risk strategy and we think that will continue to be the case. Hold your positions and take advantage of weakness.

 


Consider learning more about our premium service including our favorite junior miners which we expect to outperform in the second half of 2016.

 

Back to homepage

Leave a comment

Leave a comment