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While stocks struggled this past week, a bid in gold and gold mining stocks took hold that, from at least from a pure price action perspective, was difficult to ignore or disrespect. Will the Market Vectors Gold Miners ETF (NYSEARCA:GDX
Moving averages legend: red – 200 day, blue – 100 day, yellow – 50 day
On the daily chart, we see that the GDX ETF last week managed to score a marginal and ever-so-tight breakout past diagonal resistance in an attempt to break the series of lower highs since early this year.
Rather than overcomplicating things, here is what I am considering; Buy the GDX ETF around the $23-$23.50 area, or buy bull call spreads with at least two months left to expiration, with a next upside target around the $25 mark. Any strong bearish reversal, particularly if accompanied by a strong rebound in the broader stock market, could be used as a stop loss signal.
Check out Serge’s Daily Market Outlook for Aug. 14.
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