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)
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
//
