Gold Miners Breaking Out
May 17 2021
As per Elliott Wave analysis, we were able to anticipate a swift reversal on GOLD miners once the support level had been reached. In fact, we shared this on twitter here.
GDX Chart from February 5th:
As the chart shows, we have had an initial move up in Gold Miners which started on March 16th 2020. Since the move up was in five waves, the Elliott Wave Principle tells us that after a five-wave rally there is always a three-wave pullback.
Assuming that the five-wave rally had ended with the top on August 5th, we then were able to identify the sub sequential move down as corrective, meaning that further upside should have been expected at some point in time.
The correction appears to be a complex one, under the lenses of the Elliott Wave Theory. Such correction can be also tracked down using the parallel channel which they form and once and if the channel is broken, the trader can assume that the correction is completed.
In addition to that, we also identified the area between 30.5-32$ as potential support from where the trend could have reversed from.
Nevertheless, Elliott Wave is well known to work alongside with Fibonacci, which is the reason why we used the Fibonacci retracement to give us additional confluence to where price could have turned from, and we know that the 50% is often times an area to watch.
With all of this being said, we can now look at how $GDX actually performed:
GDX Updated Chart:
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