$GDX = Weekly Analysis = 02.07.2021 #gold #preciousmetals

GDX formed a Dragonfly Doji that could signal a bottom if confirmed. At least a short-term rally is expected next week. Let’s explore the hypothesis from different angles.

Monthly
GDX is operating under the Bearish Engulfing of June. The damage is done on the monthly scale and the odds have shifted to the dark side. While there is a chance of a short-term rally, the price is expected to revert back closer to the end of month.
A sign of recovery would be a July closure above ~$37.
Odds: Bearish

Weekly
This week GDX formed a Dragonfly Doji that could be a sign of the mid-term bottom. However, in the context of other candles and anemic weekly volume, this sign needs a strong confirmation.
If GDX closes next Friday above $35.18, the odds would shift to the bulls side.
If GDX closes below, a good chance for continued downwards move.
Odds: Neutral-Bearish

Daily
The last four candles is a somewhat unusual sequence for a strong rally. Nevertheless, it managed to close today above 8 EMA, shifting the odds to the bulls.
At the micro level, there seem to no clear motive wave off the low and the main hypothesis is that GDX has completed wave A or (1), meaning that the rally would be corrective and limited.
I placed a rectangle in the area of the most typical retrace that might take 1-2 weeks to reach there.
Odds: Bullish-Neutral

Forecast

The next week (at least the beginning) is expected to be moderately bullish.
– If GDX closes next Friday above $35.18, the odds would shift to the bulls side.
– If GDX closes below, a good chance for continued downwards move.

GDX continues to be under a strong bearish pressure on the weekly and a significant effort would be required to overcome this. The monthly closure above $37 would be the first step.

The long term targets continue to be the same, as I identified several weeks ago – $31, $25, $15, until I see a strong bullish move to recover the long-term damage.

The detailed previous Monthly and Weekly analyses with forecast can be found by the links below.

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