Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Dow Stock Market Dow Trend Forecast Current State - 22nd Apr 21
Gold Rebounds Amid Positive Economic Reports - 22nd Apr 21
China's record first quarter fuels strong expansion in 2021 - 22nd Apr 21
Gold Price Next Key Level - 22nd Apr 21
Here's What to Look For When Hiring a Real Estate Agent - 22nd Apr 21
Ethereum EIP 1559 and Raven Coin - 21st Apr 21
Gold, USDX: The Board is Set, the Pieces are Moving - 21st Apr 21
World Economies Need to Find a Lot More COPPER! - 21st Apr 21
DogeCoin CRASH! Time to Start Mining BOODGIE Coin! Crypto Mania 2021 - 21st Apr 21
Pausing Stocks and Gold Fireworks - 21st Apr 21
Precious Metals and Miners Start of New Longer-Term Bullish Trend - P2 - 21st Apr 21
Looking For A Mortgage Broker? Here Is How To Hire One - 21st Apr 21
Amazon AMZN Stock PRIMEDAY SALE! Trend Analysis - 20th Apr 21
Stock Market Sentiment Speaks: You May Not Believe My 2021 Targets - 20th Apr 21
Stock Market Phase Two Projection - 20th Apr 21
Are Precious Metals & Miners Starting A New Longer-Term Bullish Trend? - 20th Apr 21
Inflation: First the Gain, Then the Pain… - 20th Apr 21
8 Stock Market Indicators in 1: Here's the Message of the Panic/Euphoria Model - 19th Apr 21
Gold - You Can Win a Battle, but Still Lose the War - 19th Apr 21
Will Interest Rates Rally Further Push Gold Price Down? - 19th Apr 21
Gold Fireworks Doubt the Official Inflation Story - 19th Apr 21
YuanPay Team Discuss The Process Of Crypto Diversification - 19th Apr 21
Central Banks May Ramp Up Gold Buying - 18th Apr 21
How to Get Rid of Driveway Weeds With Just WATER! 6 Months later NO Weeds, Ultimate Killer! - 18th Apr 21
State of the European Markets - DAX, FTSE, CAC, AEX, SMI, IBEX 35, S&P/MIB, Euro Stoxx 50, RTS - 18th Apr 21
Einvestment Fund: What You Need To Know About Investments - 18th Apr 21
Google Alphabet (GOOG) AI Deep Mind Stock Trend Analysis - 17th Apr 21
Stocks and Bonds Inflationary Slingshot - 17th Apr 21
Best Smartphone Selfie Stick Tripod Review by ATUMTEK Works with Samsung Galaxy and Iphone - 17th Apr 21
How to Give Budgie's First Bath | Easy Budgie Bathing and Water Training with Lettuce - 17th Apr 21
Record-breaking Decrease in New Passenger Vehicle Sale in Europe - 17th Apr 21
US Stocks Climb A “Wall Of Worry” To New Highs - 16th Apr 21
Gold’s Singular Role - 16th Apr 21
See what Anatomy of a Bursting Market Bubble looks like - 16th Apr 21
Many Stock Market Sectors Are Primed For Another Breakout Rally – Are You? - 16th Apr 21
What Skyrocketing US Home Prices Say About Inflation - 16th Apr 21
Still a Bullish Fever in Stocks? - 16th Apr 21
Trying to Buy Coinbase Stock on IPO Day - Institutional Investors Freeze out Retail Investors - 15th Apr 21
Stocks or Gold – Which Is in the Catbird Seat? - 15th Apr 21
Time For A Stock Market Melt-Up - 15th Apr 21
Stocks Bull Market Progression Now Shows Base Metal Strength - 15th Apr 21
AI Tech Stocks Buy Ratings, Levels and Valuations - 14th Apr 21
Easy 10% to 15% Overclock for 5600x, 5900x, 5950x Using AMD Ryzen Master Precision Boost Overdrive - 14th Apr 21
The Current Cannabis Sector Rally Is Pointing To Another Breakout - 14th Apr 21
U.S. Dollar Junk Bond Market The Easiest Money in History - 14th Apr 21
The SPY Is Nearing Resistance @ $410… What Is Next? - 14th Apr 21
The Curious Stock Market Staircase Rally - 14th Apr 21
Stocks are Heating Up - 14th Apr 21
Two Methods in Calculating For R&D Tax Credits - 14th Apr 21
Stock Market Minor Correction Due - 13th Apr 21
How to Feed Budgies Cucumbers - Best Vegetables Feeding for the First Time, Parakeet Care UK - 13th Apr 21
Biggest Inflation Threat in 40 Years Looms over Markets - 13th Apr 21
How to Get Rich with the Pareto Distribution - Tesco Example - 13th Apr 21
Litecoin and Bitcoin-Which Is Better? - 13th Apr 21
The Major Advantages Of Getting Your PhD Online - 12th Apr 21
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold Long Short GDXJ, DGZ ETF Technical Analysis

Commodities / Gold and Silver Stocks 2014 Nov 13, 2014 - 12:51 PM GMT

By: Austin_Galt

Commodities

The analysis includes GDXJ which is a long gold fund and DGZ which is a short gold fund.

GDXJ Market Vectors Junior Gold Miners ETF

The Market Vectors Junior Gold Miners ETF (GDXJ) is an equity index that provides exposure to small and medium sized companies that generate at least 50% of their revenues from gold and/or silver mining. It is listed on the American Stock Exchange (AMEX) with price last trading at $25.73.


GDXJ Monthly Chart

GDXJ Monthly Chart

The Bollinger Bands show price potentially finding support now at the lower band. These bands have tightened considerably in the last few months which may indicate a consolidation phase and even possibly a major trend change. For the time being, I'd be looking for a rally back up to the upper band which currently stands around $46.

The lower indicators, being the Relative Strength Indicator (RSI), Stochastic and Moving Average Convergence Divergence (MACD), are all showing multiple bullish divergences. Surely something has to give here. A rally perhaps?!

Also, there are three consecutive marginally lower lows which is a common pattern found at lows. That could well be the end of the downtrend although it is too early to say. Occasionally I have noted a big rally after the third low only for price to then come back and make a fourth and final low just to make things tricky.

GDXJ Weekly Chart

GDXJ Weekly Chart

Here we can see more clearly the three consecutive lows. The MACD indicator is showing a triple bullish divergence on the current low.

The RSI is oversold so a rally would certainly be no surprise here.

The Bollinger Bands show price clinging to the lower band on this recent leg down. After last week's bullish reversal, price looks like it might be moving away from the lower band. Next stop middle band?

GDXJ Daily Chart

GDXJ Daily Chart

The Bollinger Bands show price has already moved away from the lower band and is now verging on the middle band.

The Parabolic Stop and Reverse (PSAR) indicator shows price busting the dots to the upside so a bullish bias is now in force here.

The lower indicators are all looking very bullish. Apart from some bullish divergences, the RSI, Stochastic and MACD indicators all appear to be trending up and giving good reason for the bulls to get a little excited.

Summing up, the short term is looking promising for the bulls but looking further out is still a bit uncertain.

Disclosure - I have no financial interest in GDXJ.

DGZ Powershares DB Gold Short ETN

The Powershares DB Gold Short ETN (DGZ) has an inverse relation to the movement in gold prices. It is effectively a short on the gold price. It is listed on the American Stock Exchange (AMEX) with price last trading at $16.01.

DGZ Monthly Chart

DGZ Monthly Chart

Price has been trending up since 2011 in line with the price of gold declining since then.

There looks to be a triple top in place or even still forming which is denoted by the numbers 1,2 and 3. This may lead to reaction back down. However, this triple top is against the trend so after any pullback, price should head back up and bust the triple top.

The Bollinger Bands show price is now back up at the upper band. Perhaps this will provide resistance and price heads back down. And if that happens then perhaps the pullback low will be down at the lower band. Let's see.

The Relative Strength Indicator (RSI) is showing a bearish divergence with the first high in the triple top pattern.

The Stochastic indicator shows the averages diverging quite a lot so perhaps some regression to the mean will see price move lower which sees these averages move back closer together.

Momentum has also been declining ever since the first high in the triple top.

DGZ Weekly Chart

DGZ Weekly Chart

The Andrew's Pitchfork shows the nice uptrend that has been in force since the 2011 low. Price was able to get up into the upper channel for a large part of 2013 but has since come back into the lower channel. It now looks to be attempting to get back up into the upper channel but last week's bearish reversal candle may put the kibosh on that.

I have added the moving averages with time periods of 50(blue) and 100(red) and these demonstrate the bullish position of price as the blue line is above the red line.

However, there may be some short term headwinds according to the lower indicators. Both the RSI and Stochastic indicator are showing little bearish divergences on this high.

So perhaps price now pulls back and heads down to test the lower pitchfork channel line while one of the moving averages may provide support.

DGZ Daily Chart

DGZ Daily Chart

The Bollinger Bands show price moving away from the upper band. That could well be the end of the recent uptrend.

The Stochastic indictor is now looking bearish and trending down while the Moving Average Convergence Divergence (MACD) indicator is showing a very recent bearish crossover.

So it still appears early days but the short term picture looks to be getting bearish however the medium term should still witness higher prices after any pullback occurs. Well, that's the way I see it after looking at the charts.

Disclosure - I have no financial interest in DGZ.

By Austin Galt

www.thevoodooanalyst.com 

Austin Galt is The Voodoo Analyst. I have studied charts for over 20 years and am currently a private trader. Several years ago I worked as a licensed advisor with a well known Australian stock broker. While there was an abundance of fundamental analysts, there seemed to be a dearth of technical analysts. My aim here is to provide my view of technical analysis that is both intriguing and misunderstood by many. I like to refer to it as the black magic of stock market analysis.

My website is www.thevoodooanalyst.com 

© 2014 Copyright  The Voodoo Analyst - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules