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Wednesday, March 20, 2013

GLD and GDX 3/19

In GLD and GDX 3/5 I wrote "It looks like GLD is trying to make a low here at the lower channel trend line.  It would seem to be due for a bounce."  It did indeed find a low and has bounced.  Here is the daily chart.

GLD has a blue bar indicating it is above the upper Bollinger band and is short term extended.  It is also about in the middle of the down trend price channel.  In this down trend every rally has stopped at the 50 SMA.  It still has a little ways to go to get there.  Since it is a bit extended in the short term it may need to consolidate or pull back a little before resuming the upward march.  At this point I don't see anyway to tell if this is just an over sold bounce or if it is forming an important bottom.  I am a little suspicious this is eventually going lower because of how the mining stocks tanked.  In the mean time, a pullback towards the 18 SMA could provide a long swing trade entry.

Lets shift focus to GDX.  Here is the daily chart.

GDX is also about in the middle of its price channel.   GDX has some potential resistance (red line at 39) between it and its 50 SMA.  The bounce also seems to be off to a rather weak start.  It needs a shot of upside momentum to get going or it is in danger of rolling over.


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