As I indicated in my monthly update on April 1, “a reversal would be confirmed if GDX closes above 36.28 on April 30“. Today’s weekly closure and the current monthly candle are very bullish, but there is a little something on the daily chart. Let’s have a closer look.
Today GDX closed at 36.03, very close to the monthly confirmation level. No concerns here, just two more weeks to go. I continue to maintain that “a reversal would be confirmed if GDX closes above 36.28 on April 30.”
The weekly produced a Three White Soldiers, a very powerful bullish continuation combo that is rarely reversed. The weekly candle closed above the boundary of the channel, which is a very positive sign.
The daily candle today formed a Hanging Man. This is the “little something” I mentioned before. These candles are rarely found in the bullish rallies. Often, they signify the end of them.
The week is likely to begin with a pullback. If the price bounces off the boundary of the channel (weekly chart) and resumes the climb, I would view this as a confirmation of the rally.
However, for a full confirmation of the reversal of the bearish trend of that magnitude, the month needs to close above 36.28 on April 30.