What to Expect Next in the Miners
On Tuesday we highlighted a powerful long trade setup in the GDX and yesterday the goldies rallied 5.32%. This morning we are seeing a little profit taking ahead of a big resistance level near $20:
From my vantage point the downtrend line drawn from the January high is highly significant – a breakout above this trendline and above the big round number $20 level would greatly increase the odds of a much larger move higher. Meanwhile, a 3-5 day consolidation within the $18.50-$19.90 range would be extremely highly and would serve to increase the potential energy of any eventual price breakout. Finally, notice how the RSI(14) has consistently stalled near the median line during the past 6 weeks – a breakout above the median line would be quite meaningful.