Tuesday, June 9, 2015

Gold Miners: "Buy" Signal Confirmed

In my opinion, one of the best technical signals for gold traders are those printed by GDX (big precious metals producing companies) and GDXJ (medium and small precious metals producers and explorers).

Simply put, if GDXJ is stronger than GDX (i.e. GDXJ prices are going up faster than prices of GDX or GDXJ prices are going down slower than prices of GDX) there is a friendly environment to go long both GDX and GDXJ (with GDXJ being a better investment vehicle). And vice versa.

Please, look at the chart below:

The chart shows a number of trading signals constructed on the above assumption.

Presently, there is a BUY signal generated in March 2015, confirmed in the middle of May.

Please, note a very strong key resistance / support level at $25 - $27 GDXJ. In the past at that price level many GDXJ shares were changing hands. What is more, two relevant moving averages are close to this resistance / support level (50 and 200-day moving averages).

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