GDX finds buyers at key support level
VanEck Vectors Gold Miners ETF (GDX) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
GDX ended the month 17.07% higher at 42.94 after gaining $1.31 (3.15%) today. Trading up to $0.43 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 42.68, the ETF confirmed its breakout through the prior session high after trading up to $0.35 above it intraday.
Daily Candlestick Chart (GDX as at Jul 31, 2020):
Friday's trading range has been $1.10 (2.6%), that's slightly below the last trading month's daily average range of $1.26. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for GDX.
One bullish candlestick pattern matches today's price action, the White Candle.
After trading down to 41.93 earlier during the day, GDX ETF bounced off the key technical support level at 42.24 (S1). The failure to close below the support could increase that levels importance as support going forward. When prices bounced off a significant support level the last time on Wednesday, GDX actually lost -3.48% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "White Candle" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for GDX ETF. Out of 578 times, GDX closed lower 55.36% 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 five trading days, showing a win rate of 52.08% with an average market move of 0.02%.