Based on my expectation for a pullback in the $USD & rally in gold, GDX (gold miners ETF) will be added as an Active Long Swing trade here around the 22.60 level. The price targets are T1 at 23.14, T2 at 23.92 & T3 at 24.81. The maximum suggested stop for those targeting T3 is any print of 21.90. The suggested beta-adjusted position size for this trade is 0.80.
GDX daily May 4th
My expectation for a rally in gold & the gold mining stocks is based on their technical posture as well as my expectation for a correction in the US Dollar. While I remain longer-term bullish on the Dollar, it appears that a near-term to intermediate-term pullback off the 92.25ish key resistance level in the US Dollar Index is likely in the coming weeks+.
USD weekly May 4th
The EUR/USD (Euro/US Dollar currency pair, which is essentially an inverse chart of the US Dollar index as the Euro accounts for the bulk of the US Dollar index), has fallen to the 1.20ish support level following the breakdown below the bearish rising wedge pattern that I’ve been highlighting for months now. With the EUR/USD at deeply oversold readings on the daily RSI, a bounce back up to at least the 1.21ish level appears likely.
EUR-USD daily May 4th
Of course, any analysis or long trade on GDX would be incomplete with confirming the bullish outlook for gold. GLD has fallen to a key support level & appears poised to rally along with a correction in the $USD.
GLD daily May 5th
Last but not least, if you’ve followed RSOTC for a while, you know that I typically like to hone down my entry & exit points on a trade based off the intraday charts. In this case, /DX ($USD Index futures) have broken down & are backtesting this 60-minute bearish rising wedge pattern from below. Watching (and expecting) a failure here on the backtest, followed by a break below the 92.10ish support level to spark a correction in the Dollar.
DX 60-min May 4th
As with any trade, my analysis on gold, the US Dollar & GDX will either prove right or wrong. As such, that’s what stops are for. The maximum suggested stop, as usual, is calculated using a favorable R/R to the final price target as well as factoring in a nearby support level which should contain any pullbacks. For those targeting T1 or T2 to book partial or full profits, consider adjusting your stop based on your average cost as well as your average profit potential to your preferred price target, or targets, if planning to book partial profits as the early targets while letting the rest of the position ride.