GDX pushes through Friday's high
VanEck Vectors Gold Miners ETF (GDX) Technical Analysis Report for Jun 01, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, GDX ended Monday at 35.38 gaining $1.06 (3.09%) on low volume. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Friday's high at 34.87, the ETF confirmed its breakout through the previous session high after trading up to $0.56 above it intraday.
Daily Candlestick Chart (GDX as at Jun 01, 2020):
Monday's trading range has been $0.95 (2.75%), that's below the last trading month's daily average range of $1.19. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for GDX.
Two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns. The last time a Bullish Short Candle showed up on May 15th, GDX actually lost -1.75% on the following trading day.
The market managed to close back above the 20-day moving average at 34.92 for the first time since May 22nd.
Though GDX ETF is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the nearby swing high at 36.44 where further buy stops might get activated. With prices trading close to this year's high at 37.49, upside momentum could accelerate should GDX be able to break out to new highs for the year.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 20" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for GDX ETF. Out of 156 times, GDX closed lower 56.41% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 55.13% with an average market move of -0.71%.