GDX: Weekly: 27.03.2021

For the finished week I was cautiously bearish and I continue to maintain that GDX is in the inflection zone between 34.35 and 31.22. I view that a breakout through one of these levels would set a long term direction for the stock.

Let’s explore the messages from candles.

The overall monthly pressure continues to be bearish. However, the price has popped above the 20 EMA line and there is a chance to complete the month with a bullish Harami Combo, flipping the monthly odds to the bullish side. A closure below 31.13 would confirm the continued trend down.
Three more days to wait.
Odds: Neutral

This weekly candle is very bearish. It made a Bearish Engulfing by entirely wrapping the previous green candle and it closed well below the weekly 8 EMA line.
Odds: Strong Bearish

The Friday’s candle made a clean Tower Bottom/Bullish Engulfing. However, as you can see on the chart, the candle was rejected at the 8 EMA line and the volume on Friday was smaller than of the previous selling days. It makes me think that this bullish attempt was temporary.
Odds: Neutral-Cautiously Bullish

The monthly candle will be printed on Wednesday and I am expecting the main events to happen in the first three days of the week. There is a good chance for a short lived rally on Monday-Tuesday, supported by the daily candles. On Wednesday, there is a possibility of a sharp reversal down and continuation in the remaining days, supported by the weekly candles.

The conditions for the stock direction remain the same as in previous weekly analysis.

  1. If GDX closes above 34.35 and/or above the weekly 20 EMA, the reversal would be confirmed.
  2. If GDX closes below 31.22, the bearish trend would resume.
  3. A closure between 31.22 and 34.35 would require further analysis.

I am going to post the charts with the perspective targets as soon as GDX decides which way it wants to develop.
For the next week, I am Neutral-Cautiously Bearish, waiting for the direction.

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