GDXJ closes below its opening price unable to hold early session gains
VanEck Vectors Junior Gold Miners ETF (GDXJ) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
GDXJ finished the week 1.79% higher at 40.97 after edging lower $0.09 (-0.22%) today ahead of tomorrow's Presidents' Day market holiday. Trading $0.34 higher after the open, the ETF was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on January 23rd, GDXJ actually gained 1.95% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (GDXJ as at Feb 14, 2020):
Friday's trading range has been $0.63 (1.53%), that's below the last trading month's daily average range of $0.84. 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 GDXJ. Prices continued to consolidate within a tight trading range between 40.34 and 41.58 where it has been caught now for the whole last trading week.
Prices are trading close to the key technical resistance level at 41.21 (R1).
Though the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could speed up should prices move below the close-by swing low at 40.24 where further sell stops might get triggered. With prices trading close to this year's low at 39.60, downside momentum could accelerate should GDXJ ETF break out to new lows for the year. As prices are trading close to February's low at 39.80, downside momentum might speed up should GDXJ mark new lows for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for GDXJ ETF. Out of 622 times, GDXJ closed higher 54.34% 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 10 trading days, showing a win rate of 50.16% with an average market move of 0.46%.