Kimble Charting Solutions – Gold Miners Testing 12-Year Support

Should We Buy At Inflection Point After Near 50% Decline?

eResearch | Today’s article from Chris Kimble looks at the Gold Miners ETF: GDX. The 15-year chart below shows the trend in the ETF’s weekly share price.

Chart 1: VanEck Vectors Gold Miners ETF (ARCA:GDX)

2020-03-19 Kimble Chart - Gold Miners - GDX
Source: Kimble Charting Solutions

There were a series of low points over the 15 years, in 2008, 2014, and currently now in 2020. There was also a W-formation that occurred in late-2015/early-2016.

The red line on the chart shows that the ETF has had four attempts at breaking above this resistance level at about US$31.00. The fourth “go”, at (1), was very recent … just before the plunge. GDX twice has bounced off US$16.00 at (3) (the green line), but that still represents a decline of 48%+.

For much of the last 12-13 years, GDX has traded between the two lines, the red line and the green line.

The ETF also formed a declining triangle from mid-2016 that was broken convincingly to the upside in early 2019 and tested in mid-2019 before going on to test the upper resistance indicated by the red line.

Then the crash. The first point of support for GDX is the declining upper trend-line of the triangle, which did not hold, followed by the lower trend-line of the triangle, which did hold, at least it has for now.

Kimble believes that the current successful test at US$16.00 provides an attractive entry point, but cautions that if this level does not hold, then GDX could easily drop to the lows of the W-formation around US$13.00.

To see the original post and to subscribe to Kimble’s research, please visit: https://kimblechartingsolutions.com

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About Bob Weir 329 Articles
Bob Weir has over 50 years of investment research and analytical experience in both the equity and fixed-income sectors, and in the commercial real estate industry. He joined eResearch in 2004 and was its President, CEO, and Managing Director, Research Services until December 2018. Prior to joining eResearch, Bob was at Dominion Bond Rating Service (DBRS).