GDX Gold Miners Pulls Back to Critical Support Level Sept 16
Gold – and popular ETF GDX (Gold Miners) – pulled back to a key support level.
Let’s chart the retracement (is it a reversal?) and pinpoint the critical level that will give us a big clue now.
The chart above shows the Gold Miners (GDX) in an uptrend all throughout 2016 along with Gold, seen on the lower chart window.
Though price continued higher through 2016, volume slowed down in a divergence, especially on the August high.
Look closely that on the high – yellow highlight – daily volume was under 50 million shares per day (among the lowest levels in 2016).
We also saw a persistent negative divergence in momentum into the August high.
These factors – at a minimum – suggest a steeper pullback (which is what occurred) and perhaps a reversal.
We’re focusing carefully on the $25.50/$26.00 level (green highlight).
If this retracement is complete, this is a great spot to buy GDX or individual gold mining companies – or perhaps gold itself.
If this is a reversal, then we’ll see a breakdown under this area and a departure swing “down away from” the $25.00 level.
As a trader, your job isn’t to predict but trade – and we use key levels as decision points to assess supply/demand.
Right now, focus on the green level and be ready for either outcome.
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Corey Rosenbloom, CMT
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Thanks for another great tip Corey. Gold sure does look like it ats a pivotal point. Thanks for the levels!
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