Gold Miners GDX may be loosing steam

Recently a friend asked me about GDX and I thought you might be interested in it too. First I'll give you a long term look. You can see on this chart, the 76% Fibonacci level from back on January 2008 shows a resistance at $47.18.

Now, let's zoom in to a more recent view of the same chart. Drawing another set of fibonacci retracement lines on last December's peak down to the Feb 2009 low we see a 50% retracement at $47.44, which is very close to the longer term 76% retracement at $47.18, causing a more significant area of resistance.

You can next see the recent pattern of a bearish flag drawn in here. I've drawn in red what I think may be a likely scenario for this stock. If it continues up, a resistance near $44.50 may be a good headwind and then a decline back to the $39.48 low is likely. This is my favored path. Otherwise, should it power through the $44.50 level, $49 is in the cards and possibly up to $52.


Trade happy,

Klatuu