As we did with SLW last week earlier this week, today let’s take a look at a speculative leader to the precious metals rally and plot a near term upside measurement in the GDXJ Junior Miners ETF. By looking at pictures like these we are able to keep perspective and traders are able to plan targets, entries, exits, etc.
The chart is self-explanatory as a short term target objective.
Beyond that, I see continued bigger picture progress on our macro theme, which is for renewed economic stress (maybe to a small degree, maybe to a larger one) and a return of counter cyclical pressures, which should be a fundamental positive for the gold sector.
In other words, the precious metals stock rally could have much further to go in 2014, but it is getting a little over baked at the moment. The above illustrates a target at or below which a trader might consider taking some profits.
