In yesterday’s update we discussed HUI’s acquisition of the 170 target. Personally, I also discussed wanting to be careful about trading myself out of a potential bull market. Still, profit taking is allowed and many people are traders, including day traders, so here is a little in-day management (to be tuned out by investors who are resolved toward an extended bull market).
GDX has pulled back to its rather severe uptrend line from the January 25th gap up (for which I don’t see a need to fill any time soon because it can be considered a breakaway gap that put GDX above its 200 day moving average (obviously not shown on this 30 min. chart).
There is however another gap down around 21.40. If the trend line were to give way I’d expected GDX to at least pull back to the support shelf at the 38% Fib retrace level, if not drop to fill that gap and test the support around the 62% retrace level. Meanwhile, the trend line is only being tested as of now. The other side of the coin is that there may be day traders watching charts like this and thinking ‘buy’.
The 2yr Treasury yield is bouncing and USD is at a potential bounce point. So that would go handily with any pullback (if applicable) in what have been the anti-USD and dovish Fed trades of late.