GDXJ stuck within tight trading range
VanEck Vectors Junior Gold Miners ETF (GDXJ) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
GDXJ ended Thursday at 32.74 losing $0.73 (-2.18%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (GDXJ as at Mar 26, 2020):
Thursday's trading range has been $3.47 (10.0%), that's slightly below the last trading month's daily average range of $4.43. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for GDXJ. Prices continued to consolidate within a tight trading range between 29.94 and 35.40 where it has been caught now for the last three trading days.
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, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical resistance level at 35.40 (R1). After having been unable to move above 35.40 in the prior session, the market ran into sellers again around the same price level today, missing to move higher than 35.23. The last time this happened on Monday, GDXJ actually gained 18.69% on the following trading day.
While the ETF is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the close-by swing high at 35.40 where further buy stops might get triggered.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for GDXJ ETF. Out of 684 times, GDXJ closed higher 52.63% 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 seven trading days, showing a win rate of 52.34% with an average market move of 0.30%.