Green Light for Gold Miners
Gold miners (GDX) just completed their biggest weekly gain in nearly a year, finishing up 9.35% for the week on above average volume:
Today’s rally also moved the goldies back up to levels not seen since the late-October plunge which brought many gold mining shares to below their 2008 Global Financial Crisis lows.
All the signs are signaling a green light that the gold miners may just be at the cusp of a larger move higher:
- Volume is stronger on up days than down days
- The daily RSI(14) is just above the 60 level ‘sweet spot’ and pointing higher which indicates that relative strength is growing in GDX with plenty more room to the upside before reaching any semblance of being ‘overbought’
- We saw significant momentum divergences at the recent November & December lows which strengthens the case for a major low having been put in place in November
- The Gold Miners Bullish Percent Index exploded from extremely depressed levels this week, however, it is no where near overheated territory
The $22 area in GDX is a very modest short term upside target for this rally and bullish seasonality for the sector will continue to offer a tailwind until mid-February.
Read also: Green Shoots in the Goldies