Gold miner ETF (GDX) seems primed for a bounce play.
I think there’s a good chance we could see some chop in the market this week, so I am really liking gold for a move higher.
Generally, gold prices and stock prices move inversely. Meaning, when stocks move lower, gold (and gold miners) will move higher. This is due to the fact that investors see gold as a suitable hedge against a weak market.
Here’s what I’m seeing on the hourly chart:
GDX is finding support at the 200 hourly line, and it’s looking like it wants to bounce right off of it. I will be watching for a 13/30 crossover, which looks like it is setting up nicely. I think a crossover to the upside and any weakness in the market will mean a quick and explosive move for GDX.
I will stop out of this trade if GDX closes definitively below the 200 hourly line, which is acting as a good support level. I am looking for a breakout to around $30 to take at least some profits off the table. As long as the crossover remains in tact and prices hold around the 200 hourly line, I would be willing to add to this trade.
The contract that I will go with is GDX Jan 31 2020 28 Call @ .90.