Don't Ignore This Chart!

Gold Miners Are Shining

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Gold miners have really started to shine of late. The SCTR ranking of GDX, which represents the gold miners as an ETF, pushed up a couple of months ago. After surging to new 52-week highs in February, the gold miners quickly pulled back. This week, they look set up to really push to higher highs. The relative strength is breaking a 3-month downtrend after having startied a fresh surge in October. The PPO has been staying above zero, illustrating a positive momentum. 

There are a few other factors that look solid. The miners are breaking a long trend of underperforming the metal. It is usually a very robust run in the gold mining stocks when the gold miners start to outperform the gold metal price. Thus, this development supports the idea of a big run in the gold stocks.

Lastly, it looks like the inflated protected bond ETF is starting to run; the last time that happened, gold miners dramatically outperformed gold and shot up 150%.

Together as a package, these varying methods of looking for a breakout in the gold mining stocks suggest a more lengthy run. There is lots more strong information in the Weekly Market Roundup article and video. 

Good trading,
Greg Schnell, CMT, MFTA

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Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com specializing in intermarket and commodities analysis. Based in Calgary, he is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the Market Technicians Association (MTA) and the International Federation of Technical Analysts (IFTA).

Greg is also the co-author of Stock Charts for Dummies (Wiley, 2018). Greg joined StockCharts.com in 2012 and has be instrumental in helping launch a variety of new blogs and other commentary platforms. Presently, Greg contributes market analysis commentary to The Canadian Technician, Commodities Countdown and Don't Ignore This Chart blogs. Learn More
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