Wed. Jan 19th, 2022

Per Technical traders

The Junior Gold Miners ETF (GDXJ) fell to lows near $ 43.06 recently, coinciding with lows since the end of March 2021, close to $ 43.24. While these minimums are not exactly the same, the time lapse between these unique minimums and their very close nature makes them a double-bottomed configuration.

It is very likely that this level of support will lead to a further rise in prices in Junior Miners targeting between $ 50 and $ 52 or more if the support level close to $ 43 continues to be maintained.

GDXJ can start a rally up to $ 55 or more

This could be a very exciting rally for young miners and precious metals. After nearly a year of metals and miners drifting down and sideways, this double-bottomed pattern can lead to a fairly strong rally that will bring both precious metals and miners to the next rally phase. .

This weekly GDXJ chart shows the double bottom close to $ 43 and shows an initial rally phase that may have already started at GDXJ. If the price rises above $ 47.50 with a strong upward momentum, it will likely try to rise above $ 55 and try the recent highs of May 2021 again.

If our research is correct, this move will likely cause the US dollar to weaken and precious metals to try to rise. This type of move would propel Junior Miners much further over the next few months.

If GDXJ falls below the $ 43 double-bottom level, we may see an even deeper downtrend for Metals and Miners, possibly targeting the previous support at around $ 39.50. Miners have been moving sideways in a definite downward price trend since the peak of August 2020. If miners were below the $ 43 assistance level, it would probably happen at some point. in which world markets were also under moderate price pressure, which would cause a fairly deep broad market downturn.

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We are certainly experiencing interesting times, as the U.S. Fed continues to try to push markets into unfamiliar territory. I hope Precious Metals tries to find a fund soon and any price breakdown over the next few months may be a strong warning that global markets are disconnecting from risky assets. In other words, something important is happening that could represent a volatility event

The coming months may be full of volatility and big trends. There will still be endless opportunities to reap the benefits of these extended price rotations, but the factors of volatility and leverage will increase risk levels for traders who are unprepared or have no sound strategies. Don’t get caught up in these next phases of the cycle without getting ready.

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Have a nice day!

Chris Vermeulen
Head of market strategy

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