Weekly Chart in Gold ETF (GDX) Shows Opportunity

10/06/2009 12:01 am EST

Focus: ETFS

Corey Rosenbloom

Founder and President, Afraid to Trade

Market Vectors Gold Miners ETF (GDX) - This exchange traded fund (ETF), which attempts to replicate the price and yield performance of the Amex Gold Miners Index, is in a bull market with both the long-term support line and the 200-day moving average at $37.

Click to Enlarge

On August 19, at $37.46, I said, "This seems to be an attractive entry point for this ETF, which formed a very bullish cup-and-handle formation, and, in March, a gold cross. The target for this investment is $50 to $55. Place a stop loss at $33."
On September 16, GDX hit a new high at $48 and then succumbed to profit taking.

The October 2 close is near to the first major support—the 50-day moving average (blue line) at $41.75—so first-time buyers may eye this area for a half position. 

Volume on the recent pullback is high but declining, indicating that a climax has or is about to occur. A full position could be initiated below $40.

The trading target remains unchanged at $50 to $55.

By Sam Collins of OptionsZone.com
  By clicking submit, you agree to our privacy policy & terms of service.

Related Articles on ETFS

Keyword Image
Safe Money's Defensive Moves
12/05/2018 5:00 am EST

This stock market is flailing around like a fish out of water, with whipsaws increasing every week, ...