The weekly GDX candle closed strongly bearish – completed a Falling 3 Methods just below 50w MA line. Expect a continued decline for at least one week. 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. Today the monthly candle moved below 20m MA line, a strong interim statement. Though there are 5 more days in July.
If GDX is to recover, a first sign would be a July closure above ~$37.
Odds: Strong Bearish
This week it felt like GDX just gave up. It did not even challenge the 8w EMA. Today, after 4 consecutive attempts, the weekly candle finally closed below 50w MA. Also note that the closing price is the new weekly low.
From candle formation perspective, GDX completed the Falling 3 Methods that forecast the 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 volume was very low and there is a possibility of some rally next week.
Odds: Strong Bearish
The daily candles have consolidated this week below 8 EMA. The declining volume signals a possible rally at the beginning of the week. It is yet to be seen whether this rally could develop into something stronger.
Until the daily candle closes above ~$33.60 (+2%), there is nothing bullish in the picture.
The beginning of next week is expected neutral or cautiously bullish with the bearish reversal closer to the end of 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. The levels and forecasted counts are on the monthly chart.
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.
The detailed previous Monthly and Weekly analyses with forecast can be found by the links below.
I am going away for 2 weeks and the number of posts will be reduced. I will try to do my best and share the Monthly analysis on the next weekend.
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Previous Monthly & Weekly: