The weekly GDX candle made a strong bearish statement. It confirmed the reversal hinted by yesterday’s combo. Expect a strong bearish continuation next week and possibly beyond. Let’s explore the hypothesis from different angles.
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 first sign of recovery would be a July closure above ~$37.
At the beginning of the week, the GDX rallied, however was rejected at precisely the 8w EMA. As the result it completed the Falling 3 Methods that hint for more lower prices in the coming week(s) or, possibly, months.
The technical indicators continue to drift down: MACD and RSI don’t show the signs of recovery yet. The bearish weekly 8/20 EMA cross has been confirmed this week.
Odds: Strong Bearish
A Bearish Harami on Thursday was strongly confirmed today with a powerful Maribozu candle that closed below 8 EMA. The bearish odds are so strong that the continued decline is almost guaranteed. combo that is considered quite strong and could be the beginning of a rally.
Odds: Strong Bearish
The beginning of the next week is expected very bearish. There are good chances of:
– a gap down on Monday;
– GDX losing 10% or more during the week.
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 on the weekly/monthly frames that would recover the long-term damage, the bearish odds are in force.
Long Term Forecast: November 2020 – Now
The forecast was done using Candles and EW projections in November 2020 and this is the chart with the same graphical elements now. The next few months could be very interesting.
The detailed previous Monthly and Weekly analyses with forecast can be found by the links below.
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Previous Monthly & Weekly: