I’ve received a few questions regarding GDX today & figured that I’d share this 30-minute chart. While out of town earlier this week without computer access, I missed what appeared to be a nice bullish falling wedge pattern, complete with positive divergences, as shown on this 30-minute chart below. GDX gapped above the pattern today and has move sharply higher since. Although I wasn’t able to catch this pattern before I left town, here are my thoughts along with a few potential near-term targets for those trading GDX or any of the miners.
GDX 30 minute Sept 16th
First off, keep in mind that the FOMC announcement tomorrow afternoon will almost certainly have an immediate & possibly a more lasting impact on both the US Dollar as well gold & the mining stocks, with the immediate reaction likely to be very sharp. Although I still favor additional downside in the US Dollar (which would be bullish for gold & the miners), anything is possible so keep this in mind if you plan to hold the miners into tomorrow afternoon.
The longer-term charts of both gold & GDX (weekly charts) still appear to be setting up for a major move higher but the daily charts have been chopped up quite a bit lately and just aren’t very clear IMO. As I often the case, I find it much more than a mere coincidence just how well the Fibonacci retracement levels line up with horizontal resistance levels. Each of the 4 horizontal white resistance lines/targets on this 30-minute chart were added before I put the yellow Fibonacci retracement levels (from the Aug 21st highs to the Sept 11th lows). Three of those targets line up perfectly with the three primary Fib levels (38.2%, 50%, & 61.8%) which commonly serve as the ending point for a counter-trend rally.
As such, if I were to have taken a long position in GDX on the breakout today, I would likely be looking to take profits at or just below any of those levels and preferably if it gets there before the FOMC announcement tomorrow.