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GDX Trade Setup & Entry

GDX (Gold Miners ETF) has pulled back to the 22.50ish support level within this bullish falling wedge pattern (magenta color) following the most recent divergent low & appears to offer an objective long entry for either a bounce trade & quite likely a multi-week/month swing trade. On the 60-minute chart (second) below, we can see the typical reaction on the initial backfill of a gap (the April 25th gap) earlier today with GDX pulling back to the 22.50ish support zone.

GDX will be added as an official Long Swing Trade around current levels. I plan to follow up with price targets & a suggest stop level(s) asap but just wanted to get this out before I study the charts in more detail to zero in on those levels. The suggested beta-adjustment at this time is 0.60 although I may increase that if the charts of gold & GDX continue to firm up.  The daily & 60-minute charts of GLD (gold ETF) below help to confirm the near-term to intermediate-term bullish outlook for gold & the miners & it does appear that there is a good chance that the near-term bounce in the $USD that I was calling for a week or so ago may have run its course with the dollar likely headed lower in the coming weeks or months. I would also like to see the bearish case for the US Dollar firm up as well before increasing my position in GDX.

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May 15, 2017 2:12pm|Categories: Completed Trades - Long, Gold & Commodities|Tags: |7 Comments

7 Comments

  1. joefriday May 15, 2017 2:20 pm at 2:20 pm

    Yep… been long JNUG….. I see GDXJ testing $35-36 and GDX $24.50 .. will re-assess then….assuming we get there.

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  2. ben711 May 15, 2017 2:32 pm at 2:32 pm

    GDX will have to contend with the downtrend from 2011 which is just 2% above current price. If it takes it out there are probably significant gains ahead.

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  3. rsotc May 15, 2017 2:52 pm at 2:52 pm

    Price targets for the GDX Long Swing Trade are: T1 at 23.48, T2 at 23.78 & T3 at 23.98 with the potential for additional targets to be added if the charts continue to firm up. Those 3 price targets would represent fairly modest gain (relatively speaking for GDX) of about 4, 5 or 6% from entry. Suggested stop(s) would be a 3:1 R/R to one’s preferred target(s) for a maximum suggested stop of any move below 22.11 which would account for a ~2% loss if stopped out. If using a NUGT long or DUST short as a proxy for a long trade on GDX, make sure to adjust for the 300% leverage in your position size.

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  4. Jaypha8 May 15, 2017 3:56 pm at 3:56 pm

    Im going to do the opposite of what’s in this site from now on, seems to be working with the SOXX trade and XBI

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    • GetItRiight May 15, 2017 4:51 pm at 4:51 pm

      I understand your frustration, especially with the tech oriented shorts. I have given up some time ago on shorting the indices directly and looked for good opportunities in sectors. I took the SOXX short trade because to me (as to Randy) it had a compelling risk/reward ratio. The upside seemed limited compared to potential gains to the downside.
      Unfortunately it didn’t pan out to what the technical were suggesting, but that discourage me from trying to short other sectors. I am short crude now, for a swing trade, because on my chart, it is back testing the up trend line it broke through on May 2 (chart in a post above), plus it has the 50 and 200 DMAs to contend with at 49.4. I will stop out at 50 if it doesn’t work out.
      The point is don’t dismiss all trades because some of them didn’t work out. This GDX trade has a high probability of playing out.

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    • rsotc May 17, 2017 9:27 am at 9:27 am

      Believe me, there are many trades where I wish I would have gone long instead of short or short instead of long… many. Nobody bats .1000 in trading, not even remotely close. That is why I continually preach the benefits of diversifying one’s trades, not only by going long the most objective bullish stocks or sectors setups & shorting the most bearish but also diversifying one’s trades among various sectors and asset classes.
      In recent months I’ve shared (and personally traded) plenty of long trade ideas, both official & unofficial in solar stocks, marijuana stocks, gold miners, commodities & miscellaneous stocks, including a semiconductor (QCOM) all while being short the semiconductor sector & other stocks/sectors.
      The stock market (S&P 500, $DJIA, Russell 2000, etc…) has gone nowhere for months now, topping out & trading sideways. That means while some sectors (primarily tech) has continued to rise, many others have been moving lower, creating trading opps on both the long & short side. Picking just a couple of trades or sectors can be very profitable if correct but also sharply increases the risk & amount of loss in your portfolio if wrong compared to a more diversified portfolio of both long & short trades spread among various stocks, sectors and or asset classes (stocks, bonds, commodities, precious metals, currencies, etc…).

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  5. jamesp May 15, 2017 5:57 pm at 5:57 pm

    I’m currently long GDX, GLD, and SLV. Chart setups look really solid for a swing trade to the upside

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