Using GDX as a general sector marker, we see the price dropping right down to the former resistance area around 20. That is the first of two notable support areas.
I have waited a long while to be able to do a gold stock NFTRH+ update, and now the expected initial reaction is that opportunity. MACD is zero+, RSI 50+ and AROON just went trend up (as GDX not surprisingly got hit, which happens all too often as trends change).
The pattern targets 23, which makes sense as that is where the SMA 200 resides. Watch for GDX to hold one of the two support levels before an eventual try at 23. Also, see this post illustrating the improving macro backdrop for the sector compared to last summer’s bounce, which was not a healthy backdrop. It is nothing new to our ongoing work, but it is a short, handy post stating why I would be more constructive now.
A final note is that while it does not seem likely, there is the lower channel line as discussed in NFTRH 325. That would project GDX to the 17’s.
Buy Target: 18 to 18.50 (conservative, lower support area), 19.50 to 20 (first support area). Very conservative buyers might see if it can be had in the 17’s.
Sell Target: 23 if trading, but the sector fundamentals may come into play for longer-term players
Stop Loss: A lower low to the December low, below 17
A reminder that chart based NFTRH+ updates are just trade setup ideas, which may not be revisited as the parameters are already noted. They are meant as a starting point for further research if interested. Fundamentals-based ideas are also provided for your further research only. I will not personally buy every item highlighted and will sometimes sell – without prior notice (because this takes time and resource away from NFTRH’s main functions) – any item that I do buy below target, which is something I often do as a trader. Further, I am not a fundamental stock analyst so… caveat emptor.
