Jordan Roy-Byrne: A month ago we noted that the gold stocks were headed lower and to a potential double bottom that would create another great buying opportunity. After seven straight weeks of price declines, the gold stocks rebounded last week and are off to a good start this week. We can’t be sure if a double bottom or some complex head and shoulders pattern is developing. Regardless of the specific pattern, a bottom seems to be developing and another great buying opportunity could be at hand.
The weekly chart below shows GDX, GDXJ and SIL. We’ve already noted the clear resistance at GDXJ $51 and GDX $31. It appears these markets have at least a few more months of bottoming activity ahead before they can push through that resistance. However, there is near-term upside to be had if the market can rally to that resistance. Meanwhile, the silver stocks as represented by SIL continue to look the strongest. It had the strongest summer rally and it has made a true higher low already.
If we zoom in on GDX we see a few additional positives that bode well for the sector. The three indicators at the bottom are breadth indicators.(...)Click here to continue reading the original ETFDailyNews.com article: Gold Stocks Continue Bottoming PatternYou are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)
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