GDX dominated by bears dragging the market lower throughout the day
VanEck Vectors Gold Miners ETF (GDX) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
GDX ended Wednesday at 42.85 edging higher $0.06 (0.14%). Today's close at 42.85 marks the highest recorded closing price since August 17th. The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (GDX as at Sep 16, 2020):
Wednesday's trading range has been $0.88 (2.02%), that's far below the last trading month's daily average range of $1.39. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for GDX.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
Prices are trading close to the key technical resistance level at 42.89 (R1). After having been unable to move lower than 42.52 in the prior session, GDX ETF found buyers again around the same price level today at 42.60. The last time this happened on September 8th, GDX gained 4.34% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 43.60 where further buy stops might get activated. With prices trading close to this year's high at 45.78, upside momentum could accelerate should the market be able to break out to new highs for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Down Move" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for GDX ETF. Out of 394 times, GDX closed higher 57.61% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after two trading days, showing a win rate of 54.31% with an average market move of 0.20%.