this is the first of several components of GDX that are sitting at, slightly above, or in some cases, like GBG here, just below very critical support. as most of you already know, i am a big fan of the volume at price histogram. volume at price gives a nice visual on the amount of volume for a particular price range. what jumps out at me right now is how many of these gold stocks sit right at the bottom of the range where almost all of the trades in these shares have taken place in the last several years. more often than not, when stock prices enter these very thin zones shown on the volume at price histogram, they tend to fall rapidly, not unlike a regular “price” thin zone or gap on a candlestick chart.
as i always like to say, support is support until broken and although some of these stocks that i show below have just broken down today on the daily chart, as has GDX, these patterns i show below are multi-year patterns and therefore need at least one weekly candlestick breakdown to confirm. of course, aggressive traders or anyone already short could continue to scale on those positions breaking down from daily patterns. the large amount of volume at price bars you see up top pretty much represent all the gold-bug fever buying since the 2008 financial crisis. again, these charts are at very critical levels IMO and when i get back in town on monday i will re-visit these and some other gold stock charts to try and identify some specific trading target, short or possible even long if the charts indicate it. please note that it’s late (almost 1 am my time) so i didn’t have time to add my usual annotations and targets but the bigger picture on these charts is really pretty clear IMO.
as far as GBG here, when a stock makes a new all-time low like this, from a TA perspective it is exactly like an all-time high in reverse. all-time highs in stocks are so bullish because there is literally not a single remorseful (underwater) holder of the stock at that point. vice-versa for a stock making new all-time lows. everyone in the stock is underwater and unhappy (except for the shorts) and as such, selling often begets more selling.
