Clicky

GDX Support Level & Price Targets

GDX has gone exactly nowhere for over a month now, trading in this sideways trading range. While an upside break is certainly a possibility, the strong negative divergences in place point to a downside resolution of this range as the more likely outcome.Awaiting a break of the 18.85 support level for the next sell signal in GDX (gold miners etf).

GDX 60-minute March 28th

GDX 60-minute March 28th

2+
Mar 28, 2016 10:33am|Categories: Gold & Commodities|Tags: , |2 Comments

2 Comments

  1. pangblood March 28, 2016 11:24 am at 11:24 am

    @rsotc
    In your experience of trading, how often are gaps filled? I ask because I see a gap at the 15.6 area
    and two small gaps at the 13 area. Then there’s the big gap at 20. I’ve read that most gaps do eventually get filled, and the article pointed at a nasdaq 100 gap back in the 2001’s. What’s your opinion on this?

    Thank Randy

    0

    • rsotc March 28, 2016 11:55 am at 11:55 am

      As you said, gaps are very often backfilled, especially those in relative close proximity to where prices are trading. Based on the longer-term bullish technical outlook for GDX, my best guess is that if a correction does take it back down towards the 16ish area, chances are that GDX would reverse off the top of that Feb 3/4 gap that I believe you are referring to.

      That gap (i.e.- the bottom & top of the gap) is what defines my “max. downside target zone”. The reasons that I’m currently leaning towards are reversal off the top of that gap vs. a backfill (i.e.- move down to the bottom of the gap) is that:
      1) GDX would have already made a very powerful correction at that point & again, with the longer-term charts looking like a new bull market is likely underway in the miners, and corrections in the coming months are likely to be more towards the shallow end vs. the deeper end.
      2) The top of that Feb 3/4 gap & my target zone also lines up nearly perfectly with the 61.8% Fibonacci retracement level (those dashed yellow lines) of the move off the Jan 19th bottom to the recent March 17th highs. Many traders use Fib levels as support/resistance so that makes the top of that support zone dual support (gap/price + Fib).

      1+

Comments are closed.