$GDX = Weekly Analysis + Forecast = 25.06.2021 #gold #investing #trading #preciousmetals

This week GDX has taken a pause under the bearish pressure. The weekly and monthly candle formations signal a continued decline. Let’s explore the hypothesis from different angles.

If GDX does not rally sharply for the the next 3 days, the monthly candles would form a Bearish Engulfing. If the engulfing happens, the $25 and $15 targets (that were discussed last week) would become reality. Technical indicators support the southbound move.
Odds: Bearish

After the previous week formation, GDX took a pause and formed a candle that can be viewed as bullish or bearish, depending on other indicators. In the last few hours of Friday trading, some indicators moved from the bullish to the bearish positions. For example, RSI moved back below 50 and MACD histogram flipped negative. Such move supported the hypothesis that the candle is rather bearish than bullish.
Odds: Strong Bearish

The previous week decline was so aggressive that it took the stock the whole week to move itself back into the Bollinger Bands. All this time the price stayed below 8 EMA line and did not even try to challenge it. My assessment is that the stock was taking a pause before the next move downwards.
Odds: Bearish

From the forecast 2 weeks ago: “I am expecting a possible bullish action at the beginning of the week and the red candles closer to the end. Based on the minor waves, there is also a chance of an immediate move down. If the next week closes below 38.01 with a red candle, it would open a path to 31, 25, and even to 15, the most typical Fibonacci levels for corrective waves, as marked on the monthly chart. This would also mean that a multi-week/month decline is ahead.”

From the last week forecast:
“There is chance of a minor rally or horizontal development for several days, so that the indicators normalize. “


Next week we should see some directional moves. Strong bearish pressure on all time frames could cause a sharp decline in the next several days. From the perspective of Elliott Waves, it is not clear yet whether the next wave down would be wave 3 or 5. There are indications of both, but more data is required for an accurate assessment.

Targets continue to be the same – 31, 25, 15.

There are somewhat similar candle structures in the gold spot and gold futures.

I am seeing a possibility of forming an Ending Diagonal for wave 5. In this case, GDX would touch a lower low below $34.10 and than rally immediately to over $35 (+3% or so). If all this happens in one trading day, there would be a good chance that the bottom is in and the whole correction could be over. Probability – less than 50%. I will post an update if this happens.

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