GDX: A Pullback is Due
GDX (Gold Miners ETF): A Pullback is due
I am expecting a pullback foe the following reasons:
- Daily RSI is displaying a negative divergence: If the trend line support in force since the December's low is breached we should expect weakness probably at least the RSI drops to the 50 line.
- Price has reached a resistance located at the October 28 lower high at 26.91 Given the extended move probably it will not bee able to break above it at the first attempt. It is just a "mock-up" draft sketch but if we get a deep retracement at the gap located at 23.91 price could be forming a massive IHS (Theoretical target at 33).
- Price could be forming a Rising Wedge, if today the 10 dma = 26.10 holds and price completes the pattern with one more up leg within the converging assumed pattern. If the wedge pans out we have two potential target ranges for the expected pullback:
- The 200 dma which stands at 25.11
- The range 24.69 - 23.91 where we have two gaps that can be filled at the trend line support in force since the December 23 low.
I am expecting a higher low. If the assumed pullback is a wave (B) it should bottom in the lower target range.
Therefore if the wedge pans out I will go long DUST (Gold Miners Bear 3x ETF).