The gold sector has been smacked down pretty hard over the past week. And, there’s still more selling ahead.
Yesterday, GDX traded down to $34. That’s a pullback of almost 7% in just the past week.
By the look of the following chart, there’s still plenty of room for GDX to fall even more. Take a look…
The action over the past two months has created a small “head and shoulders” pattern on the GDX chart. This is a bearish pattern that often signals the reversal from a bullish trend to a bearish trend.
GDX has support at the “neckline” of the pattern at about $34. But, if that support fails, and GDX breaks the neckline, then it could quickly head towards the next support level near $30.50.
That would be a decline of about 20% from last week’s high. And, that would be on par with the 15% decline in GDX last September, and the 18% decline in late February – which occurred right after the last two BPGDM sell signals.
So, even though gold stocks are lower today than they were when we looked at them last week, there’s still more downside ahead.
Traders who are hoping to buy into the sector on weakness should stay patient. Gold stocks are still likely to be lower in the weeks ahead.
Best regards and good trading,
In today’s mailbag, Steve and Robert celebrate their recent profits…
I’ve really enjoyed the Breakout Alert, but more importantly, Jeff’s insight into the market and his explanation of what’s happening with every investment. While I gained over 100% in both NVAX and MRAM, I’ve done even better on put options and look forward to the next few weeks as the market hopefully declines. GDX is looking great!
My wife and I plan on taking the gains and buying a Sprinter Van where we can explore North America while we bike, ski, hike, and surf, or just hang out! Thanks for all your wisdom Jeff!
MRAM and NVAX were both big winners for me. MRAM netted me a 133% profit. NVAX netted me a 128% profit.
On a fixed income, making profits like this lets me actually think about taking my amazing wife on a Viking cruise, visiting our granddaughter in Florida, letting my daughter live out her dreams in New York City, and helping out my two grown sons. Looking forward to more!
Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming at [email protected].
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