We had reviewed something of a wedge or ending diagonal, represented by the lower red line. That is being broken this morning as the 50 day moving average is also being lost. Nothing like a massive hype-fueled knee-jerk to get the job done.
GDX has dropped to near support at 37.30 and I have drawn in a parallel blue dotted line to match the upper one. If the correction ends here, GDX will have shed the wedge and hit the bottom of its channel in preparation for the next rally. A side benefit is that the Sept. 12 gap was filled this morning.
However, with all this energy in motion now and this being the ever volatile gold stock sector, let’s be aware that the 200 day average (orange) is rising toward the broken (black dotted) trend line. That junction could also be tested (at 35 +/-) if the correction gets intense enough.
Just a quick view for your consideration. I am still holding my hedges, but watching with interest as the sector becomes oversold.
For perspective, the weekly chart shows the black downtrend channel that was broken to the upside.
