Gold Stocks Breakout, Gold to Follow
By: Jordan Roy-Byrne, CMT
GoldSeek.com
Friday, 8 April 2016
Last week we concluded:
As long as the gold stocks continue to hold support for another week or two then the near term outlook is bullish. A bull flag is a consolidation pattern that separates two strong moves. It could be developing in the miners. There is logical reason to be cautious if not bearish at this point. The metals look okay at best while the miners remain somewhat overbought. However, the action in the miners, if it continues for another few weeks is telling us what could be ahead.
The strength in the miners continues to surprise as the majority of pundits look for any reason for a pullback in the face of very bullish price action. The gold miners are now breaking out and Gold is likely to follow.
The weekly candle charts of GDXJ and GDX are shown below along with their 80-week moving averages. Note that the miners advanced for six weeks and their bullish consolidation began during that sixth week in late February. This week marks the fifth week since the previous advance. The miners are a little overbought here but not as much as they were five weeks ago. Moreover, we should note that overbought can become very overbought and extremely overbought. The immediate upside targets are GDXJ $33 and GDX $22.50 and it is possible this move has even greater upside.
The Rest…HERE
