GDX Reverses Higher On Strong Volume
Justin Smyth | Jul 09, 2014 07:17AM ET
Market Vectors Gold Miners (ARCA:GDX) printed a nice hammer candlestick in today's session on above average volume. I really like the technical setup in gold stocks right now. We have a bullish flag formation after a breakaway gap higher and the flag contains a cluster of high volume accumulation days. Plus I'm looking at leaders like FNV, TAHO, and SWC that are not giving back any ground as the metals consolidate. I'm still seeing a lot of chatter on the Internet about the latest COT report being super bearish for gold, and I disagree with that conclusion which makes this price action extra interesting.
I think the commodity trading funds are simply re-positioning to the long side of gold after it reversed higher a month ago and that should be bullish as they help propel gold higher going forward. Also I think people probably tried to get cute and take profits in this latest rally in gold, but since there's not much of a pullback they are going to be left behind if they didn't buy back in. That's why I favor getting positioned and sitting tight, and staying positioned for the big move.
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