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Precious Metals Mining Stocks Setting Up For A Breakout Rally – Wait For Confirmation

Commodities / Gold and Silver Stocks 2021 Apr 01, 2021 - 03:04 PM GMT

By: Chris_Vermeulen

Commodities

Precious Metals have continued to slide sideways as the US stock markets have rallied into the FOMC meeting last week.  Not by coincidence, metals have continued to base/bottom near recent lows as concerns about the global debt/credit markets, central banks, and precious metal supplies continue to linger.  The US Fed indicated it will do whatever is necessary to support the recovering economy.  The question my research team asks in relation to the basis for a move in metals/miners is “do the global markets believe the global central banks still have control of the underlying global banking/credit markets well enough to prevent another massive rally in metals?”.

This question should be first and foremost for metals precious metals enthusiasts.  Recently, there has been quite a bit of concern related to a Silver Squeeze and COMEX deliveries.  Currently, there is some speculation that the Perth Mint has a very limited supply of physical metals on hand and nearly 60x that amount on their balance sheets (Source: https://www.reddit.com/r/Wallstreetsilver/comments/mc18no/perth_mint_unallocated_silver_is_not_backed_by/).  We’re no expert related to this lack of physical inventory, but if it is true, then a breakout rally in metals (a true metals SQUEEZE) could be just days or weeks away.


Wait For Confirmation Of Miners Bullish Breakout

The charts we are including in this article suggest “Wait For Breakout Confirmation” because we believe the current technical/price setup may prompt a bit of an extended bottoming formation.  If and when the breakout in miners happens, the upside price move could be very quick and efficient.

The Weekly NUGT chart, below, shows how well price has consolidated near the $51 level and how the extended downside trend line (originating from the 2016 peak) aligns with the current price level.  Our researchers believe once this trend line is breached to the upside, NUGT may attempt a rally to levels above $108, the 0.618 Fibonacci Price Extension level, fairly quickly (possibly within 3 to 6+ months).  The $146 target level, a full 100% Fibonacci measured move, would represent a massive +167% price rally in NUGT (if it happens).  Quite literally, this breakout setup could be very explosive if and when it happens.

Junior Silver Miners Showing Stronger Support – Waiting For Breakout Confirmation

The following Weekly SILJ Junior Silver Miners chart shows a different type of price setup.  Junior Silver Miners have held up much stronger than Gold Miners over the past 6 months.  The reported Silver Squeeze could prompt a really big breakout trend IF and WHEN the current Pennant/Flag formation completes (which appears to be only a few weeks away).

Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!

The first (0.618) Fibonacci target is near $20.50 – a 40% increase from current price levels.  The second target, a100% Fibonacci measured move, is near $25.25 – a 74% increase from current price levels.  Ideally, this type of breakout move in Metals Miners will happen as a pause in the upward movement of the US Dollar takes place.

I believe the US stock market will continue to rally 4% to 8%, or more, over the next (3 to 5+) few weeks.  After that, we may start to see more weakness in the US stock market and the price trends leading up to this period of weakness is where we think Metals and Miners may start to rally.

Again, we need to wait for confirmation of these breakout moves.  The technical/price setup we are seeing in both NUGT and SILJ suggests a potential breakout move may happen within the next 2 to 5+ weeks. There could be a deeper downside price move, a washout price low, that happens as the APEX of this move completes.  It is not uncommon for a “washout” trend to happen near a Flag/Pennant APEX.

Overall, the next few weeks in the markets suggest we are likely to see fairly big sector trends and moderately strong support for Metals and Miners.  The strength of the US Dollar will likely keep metals from attempting any type of breakout move for a few more weeks.  When the Metals/Miners breakout move starts, though, it could be VERY EXPLOSIVE.

Don’t miss the opportunities in the broad market sectors over the next 6+ months.  2021 and beyond are going to be incredible years for traders.  What we expect to see is not the same type of market trend that we have experienced over the past 8+ years – this is a completely different set of market dynamics. You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets. 

For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers

Chris Vermeulen
www.TheTechnicalTraders.com

Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and is the author of the book: 7 Steps to Win With Logic

Through years of research, trading and helping individual traders around the world. He learned that many traders have great trading ideas, but they lack one thing, they struggle to execute trades in a systematic way for consistent results. Chris helps educate traders with a three-hour video course that can change your trading results for the better.

His mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility.

He is a regular speaker on HoweStreet.com, and the FinancialSurvivorNetwork radio shows. Chris was also featured on the cover of AmalgaTrader Magazine, and contributes articles to several leading financial hubs like MarketOracle.co.uk

Disclaimer: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Cardiff Energy Corp. In addition, the author owns shares of Cardiff Energy Corp. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.

Chris Vermeulen Archive

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