Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Seeker Weekly Wrap-Up: Gold and Silver Close with Modest Losses but Miners Gain on the Week
By: Chris Mullen, Gold Seeker Report

Ira Epstein's Metals Video 11 24 2017
By: Ira Epstein

Life Under Manipulation
By: Theodore Butler

Legendary investor names his top junior resource stock picks right now
By: Peter Spina, President, CEO of GoldSeek.com & SilverSeek.com

Silver Miners’ Q3’17 Fundamentals
By: Adam Hamilton, CPA

Deflation must be embraced
By: Alasdair Macleod

Gold’s 47-Year Bull Market
By: Steven Saville

Taxes, Macro Signals, Seasonality, US Stocks and Gold Miners
By: Gary Tanashian

The Key to Profitably Ending Precious Metals Price Suppression And Other Markets Manipulation!
By: Deepcaster

The Precious Metals Bears' Fear of Fridays
By: Dimitri Speck

 
Search

GoldSeek Web

 
Correction or Final Push Higher?


 -- Published: Friday, 13 May 2016 | Print  | Disqus 

By: Jordan Roy-Byrne, CMT

Despite maintaining an overbought condition and despite the recent bearish posture of many sector pundits, the gold stocks have yet to correct more than 11%. Since the end of January the gold stocks have held above their 50-day moving averages, which is often support during a strong trend. If the gold stocks break their lows of the past two weeks then it should usher in a 20% correction and correct the current overbought condition. However, if gold stocks do not break initial support they could begin a melt-up that would lead to a more serious correction in the summer.

The chart below plots the three major rebounds in the HUI from the three most significant lows. The time and price scale begins from where the current rebound started. At this juncture, the two other rebounds corrected at least 20%. The current rebound has tracked the 2008 rebound very closely. That bull endured two 20% corrections over the next few months which proved to be good buying opportunities.

May122016HUed

HUI Bull Analogs

If the gold stocks do not break initial support and correct more, they would be at risk of a deeper correction following another push higher. The following chart is GDM, the parent index for GDX. Unlike GDX, GDM has a history that dates back to 1993. GDM closed Thursday at 684. It has a major resistance target at 800-810. A move to 800 is 17% upside while a move to 810 equates to GDX 29.

May122016edGDM

GDM Daily

Also note the three oscillators at the bottom of the chart which plot GDM’s distance from its 100-day, 200-day and 400-day exponential moving averages. The gold stocks are not as overbought as they were in 2002 but they are more overbought than at any other time in the past 23 years. That is a good sign considering we are early in a new bull market but it does warn of a probable sharp correction.

The support and resistance for GDX and GDXJ continue to be clear. GDXJ has support at $32-$33 with upside targets at $43-$45 and $50. Meanwhile, GDX has support around $22 with upside targets at $27-$28 and $30. A final push higher (before a correction) could take GDX to $29-$30 and GDXJ to $45.

May122016edminersw

GDXJ & GDX

The past few months has been an amazing ride in the gold stocks but all good things come to an end. Unless the gold stocks break initial support and correct by 20% (from recent peaks) then the risk of a final push higher or melt-up type move increases. That is great for us bulls but the problem is it would likely lead to a 30% correction and a potential multi-month consolidation during the second half of 2016. Consider learning more about our premium service including our favorite junior miners which we expect to outperform in 2016.

Jordan Roy-Byrne, CMT

thedailygold.com

 


| Digg This Article
 -- Published: Friday, 13 May 2016 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.