-- Posted Wednesday, 4 December 2013 | | Disqus

By Scott Pluschau

Notice the heavy and consistently above average Volume on the 5 year Weekly chart in the Gold Miners Exchange Traded Fund symbol GDX on the lower sub-graph as it has been down on the lows the past several weeks.

Markets that see heavy Volume pouring in on large pattern breakdowns would be Bearish in a big way, but in the case of GDX it has been a Bear trend for two years. This is the sign of a "washout" and shares changing hands from weak hands to strong hands.

I have had no position in GDX all year, but I am eager to put on one on with the first sign of a quality reversal pattern due to the pattern of Volume being one of glaring "Accumulation". Timing the bottom or trying to catch the "falling knife" I have no interest in. A minor reversal pattern on the Daily chart will increase the odds.

There is Major overhead horizontal resistance around the 32.50 level that I have marked with a grey trendline, where there was a gap down previously. A change in trend would be confirmed in my opinion on a breakout to the upside here, and that would be a favorable trade location for me to build on any existing entry level position.

(Click on chart to expand)

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-- Posted Wednesday, 4 December 2013 | Digg This Article | Source: GoldSeek.com

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