GDX Gold Mining Stocks Approaching Key L/T Resistance

I've received several inquires for updates on GDX & the gold mining sector recently, including a request for an update on GDX & SLW from member @consultlee in the trading room today. My thoughts on each are below (weekly charts) but I also wanted to pass along the fact that my commentary and analysis for a particular index, sector, stock, commodity, etc.. will ebb & flow depending on whether or not I see anything compelling in the charts.

The gold mining sector is one of those sectors where I just don't see anything compelling in the charts right now, including any actionable trade ideas, at least not in the near-term. In the intermediate-term (weeks to months), however, I do have a pretty strong opinion which is that GDX is extremely overbought while approaching major resistance with the 38.2% Fibonacci retracement level just above. As such, the R/R to enter new long positions in not favorable yet the miners are still just shy of the 31.30ish major resistance level with the possibility that the current upside momentum could cause them to briefly overshoot that level, quite possibly to the 38.2% Fib retracement of the 2011-2016 bear market before a meaningful reaction (pullback and/or multi-week/month consolidation). However, on the flip side, I just don't see a compelling reason to short the miners at this time either.

For those that have followed RSOTC for some time now, you've probably noticed that I will suddenly focus on a particular sector that stands out as a trading opportunity, then follow up with increased commentary & trade ideas within that sector lasting for days, week or even months & then move on to the next attractive trading opportunities, with little to no follow-up on the previous sector(s) or stocks that I was focused on, that is until the charts once again begin to set up in a clearly bullish or bearish posture. I like to actively engage a stock or sector when an the charts are clearly confirming the trade & then step aside when the next direction isn't very clear or the likelihood of a choppy, sideways consolidation range is high.

To continually post analysis on every sector, commodity, index, etc.. would not only be extremely time consuming but would also serve to dilute the value of the analysis on the site as continuous updates on a security that I don't have much of an opinion would tend to distract from or make it easy to miss those times where I do see some compelling developments in the charts. I am always scanning the markets for any potential trading opps that stand out and my primary focus with RSOTC is to provide streamlined market analysis & actionable trade ideas. With that being said, I welcome & encourage requests from members for updates or my opinion on any current or past trade ideas as well as any other potential or current trade ideas that you might be following. In fact, a fair number of official & unofficial trade ideas on the site were the result of a member sharing or inquiring about those trade opportunities.

2017-03-08T21:19:39+00:00 Jul 13, 2016 1:21pm|Categories: Gold & Commodities|Tags: , , |Comments Off on GDX Gold Mining Stocks Approaching Key L/T Resistance