GDXJ rises to highest close since August 6th
VanEck Vectors Junior Gold Miners ETF (GDXJ) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, GDXJ ended Wednesday at 61.80 gaining $0.42 (0.68%). Today's close at 61.80 marks the highest recorded closing price since August 6th. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (GDXJ as at Sep 16, 2020):
Wednesday's trading range has been $1.32 (2.11%), that's far below the last trading month's daily average range of $2.17. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GDXJ.
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.
After trading down to 61.37 earlier during the day, the market bounced off the key technical support level at 61.51 (S1). The failure to close below the support might increase that levels significance as support going forward. After having been unable to move above 62.72 in the prior session, GDXJ ETF ran into sellers again around the same price level today, failing to move higher than 62.69. The last time this happened on September 8th, GDXJ actually gained 4.58% on the following trading day.
Crossing above the upper Bollinger Band for the first time since July 27th, prices have shown unusually strong upward momentum in the short-term. This could either indicate a potential buying climax after which prices might head back down towards the mean of the Bollinger Bands at 58.90 or signal the beginning of a strong momentum breakout leading to even higher prices.
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 62.72 where further buy stops might get triggered. With prices trading close to this year's high at 65.95, upside momentum could accelerate should the ETF be able to break out to new highs for the year.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close above the upper Bollinger Band" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for GDXJ ETF. Out of 136 times, GDXJ closed lower 57.35% 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 60.29% with an average market move of -0.90%.