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Gold Stock Technicals During Dog Days of Summer

Commodities / Gold and Silver Stocks 2016 Aug 20, 2016 - 06:04 PM GMT

By: Jordan_Roy_Byrne

Commodities

The gold stocks are trading around their highs but have failed to breakout this August. Is that due to the dog days of summer, the upcoming Fed conference or something else? We aren’t sure and don’t think it matters a great deal anyway. With that said, let’s delve into the current technicals.  


The weekly candle charts of GDXJ (top) and GDX (below) are shown below. The miners have remained strong but are struggling to break higher here during the dog days of summer. GDXJ is set to close around $50 and GDX around $30. The weekly charts show strong support at GDXJ $44 and GDX $27. Call that about 10% lower.

GDXJ, GDX Weekly Candles

Let’s turn to the hourly chart which gives us a look at what to expect in the days ahead. We see that GDX (bottom) and GDXJ (top) have failed to break to new highs in recent days. Today the miners traded lower, confirming the failed breakout. The miners remain in good shape overall but could trade to lower levels next week. GDXJ has a confluence of support around $47 while GDX has good support at $28-$29.

GDX, GDXJ Hourly

Overall, the current rebound in the miners remains well intact but susceptible to further short term weakness. It would not surprise me to see a 5% to 10% decline in the wake of the Fed conference. Judging from the broad strength in the charts and the litany of those looking for a correction (including those calling for one since February) my guess is the weakness will not last very long.

For professional guidance in riding the uptrend in Gold, consider learning more about our premium service including our favorite junior miners which we expect to outperform in the second half of 2016.

Good Luck!

Email: Jordan@TheDailyGold.com
Service Link: http://thedailygold.com/premium

Bio: Jordan Roy-Byrne, CMT  is a Chartered Market Technician, a member of the Market Technicians Association and from 2010-2014 an official contributor to the CME Group, the largest futures exchange in the world. He is the publisher and editor of TheDailyGold Premium, a publication which emphaszies market timing and stock selection for the sophisticated investor.  Jordan's work has been featured in CNBC, Barrons, Financial Times Alphaville, and his editorials are regularly published in 321gold, Gold-Eagle, FinancialSense, GoldSeek, Kitco and Yahoo Finance. He is quoted regularly in Barrons. Jordan was a speaker at PDAC 2012, the largest mining conference in the world.

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