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GDX Trade Update, Bearish Pennant Breakdown

As a follow-up to the GDX update posted earlier today before the market opened, here's the updated chart of GDX along with the chart posted in earlier this morning. GDX did go on to breakdown below both the bearish pennant continuation pattern as well as the 26.50 minor support just below & has recent hit the first of the support levels (25.65) on that 60-minute chart. That support level was set at the reaction high near the bottom of the large June 23/24th gap and as such, the odds for at a reaction off that moderate support level are quite elevated.

 

With the closing bell ringing as I type, I'd have to say that while I can see the possibility for a little more upside following the bounce off that level so far carrying over into early trading tomorrow (GDX bounced a little higher since the screenshot above to close at 25.90), I'm still leaning towards more impulsive selling down to at least the first target on the GDX/NUGT short (or DUST long) of 24.85 & quite possibly to the top of the June 3rd gap around 24.00. The previous 4-hour chart (first one below) shows the timely entry on the GDX official short trade at the top of the recent bearish pennant/snap-back rally (while unofficially, it was covered as an objective short just off the highs). I've also added that 24.00ish support/potential target on the updated 4-hour chart (second below) for those wanting to hold out for additional gains beyond T1 but shy of T2 although the official price targets remain 24.85 & 22.28.

 

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Aug 30, 2016 4:14pm|Categories: Completed Trades - Short, Gold & Commodities|Tags: , , |5 Comments

5 Comments

  1. joefriday August 30, 2016 7:34 pm at 7:34 pm

    Thanks Randy…I’m holding my DUST until GDX sees at least $25.. will re-evalulate then..assuming I’m right and it gets that low..

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    • joefriday September 1, 2016 7:54 am at 7:54 am

      Sold my dust…watching forming of potential 4hr bullish divergence in GDX

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  2. GetItRiight August 31, 2016 12:00 am at 12:00 am

    Posting less, since I am on vacation on Maui right now (on hurricane watch), but still managed to put in a good DUST long trade based on your bearish pennant chart pattern. Managed to exit pretty well at 41, with the high at 41.09. GDX tagged the longstanding down trend line from the ATHs almost to the penny, depending on how you draw it. I would expect a stronger reaction from this, as it is a first time hit since Jun 23, but no more than 26.7, which is the bottom of the consolidation range from these last few days. One thing that gives me pause in buying DUST again if it gets there, is that daily RSI is under 30, slightly oversold. I will keep watch for now.

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    • rsotc August 31, 2016 12:21 pm at 12:21 pm

      Congrats on that DUST trade GIR. I agree, no need to force another trade if you don’t have a high degree of confidence. Hope the storm misses you over there. Down here in FL I have the same tropical depression that forced me to cancel a fishing trip in the Bahamas last weekend now crossed over into the Gulf from the Atlantic, poised to hit north FL as a tropical storm this weekend. Hope you get some sunny days in before your vacation ends.

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  3. dan123 August 31, 2016 9:48 am at 9:48 am

    Thanks Randy

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