Clicky

GDX Symmetrical Triangle Breakout Pending

After closing at the top of the triangle pattern yesterday (30 minute chart), GDX moved lower to close at the bottom of the pattern today. An upside or downside resolution is likely to come tomorrow or by Wednesday, latest. As is typically the case during symmetrical triangle patterns, the price & momentum indicators & oscillators aren't providing many clues as to which way the pattern will break. I'm leaning towards an upside resolution of the pattern but might pass or just take a partial position for a trade if we get an upside breakout of the pattern as the FOMC decision on Wednesday is almost certain to cause a very fast rip or dip in both the US Dollar and gold.

GDX 30 minute 2 Oct 26th

GDX 30 minute 2 Oct 26th

 

Zooming out to the daily time frame, that symmetrical triangle pattern also has the appearance of a large bullish pennant formation, with a measured target to roughly the 20.50 horizontal resistance level. However, if even GDX does make a solid break above the pattern it would likely find resistance at the downtrend line generated off the September 2012 highs. A solid break & close above this trendline would certainly be a bullish technical event for the gold mining sector.

0
Oct 26, 2015 5:35pm|Categories: Gold & Commodities|Tags: , |6 Comments

6 Comments

  1. RickySixx6 October 27, 2015 10:26 am at 10:26 am

    This very well could shape up to do what appears to be the most obvious: GDX 16 —> 18 ceiling —> back to 14-16 level [closer to 14 if gold goes to new lows or close to the old ones] and now you have your new higher low.

    If GDX hits 18 there’s a very good chance we’ll look back at a price of 13.XX as the real bargain bottom.

    Thoughts?

    0

  2. RickySixx6 October 27, 2015 11:27 am at 11:27 am

    I should add, the alternative (If things go south) could result in a repeat of GDX price action from where we were at on Feb of 2015. One can make a strong argument that what happened from August of this year up until now is exactly what occurred from Oct 31 2014 up until the end of Feb before things headed south again.

    0

  3. alicn120 October 28, 2015 9:55 am at 9:55 am

    GDX bull flag/ symmetrical triangle breaking out to upside.

    0

    • rsotc October 28, 2015 10:23 am at 10:23 am

      Personally, I’m ignoring any breakouts or breakdowns before & shortly after the FOMC announcement this afternoon. From my experience, breakouts that occur the day or two before an FOMC meeting announcement have a considerably elevated failure rate.(i.e.- whipsaw signals are more the norm than the exception). That’s not to say that this breakout can’t or won’t stick, just be ready for some potentially sharp moves in the miners after 2pm ET today.

      0

  4. RickySixx6 October 29, 2015 11:23 am at 11:23 am

    looks like the “South” plan took place. Dust now showing some strong momentum. Anywhere from 15-17.5 before any significant short term correction. In my opinion, the medium term outlook could mean a GDX at 14 before assessing whether or not we’ll see a decent bounce from there OR potentially new lows, but for now I don’t see how we don’t resist 14-14.5 for GDX. Feel free to agree/disagree or comment either way.

    0

    • rsotc October 29, 2015 2:52 pm at 2:52 pm

      Certainly a solid & impulsive breakdown below the triangle pattern on GDX which is/was bearish. Despite that, I can still make the case for a likely top in the $USD as well the intermediate & possibly longer-term bullish case for gold, silver & the miners. Near-term bias is down but I started nibbling as some NUGT yesterday which I’m sitting tight on now but may add to soon GDX has some pretty solid support around the 14.50-14.70ish level so I may add there with a stop not too far below.

      0

Comments are closed.