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The Market Vectors Gold Miners ETF Could Be The Next Great Trade In 2014

|Includes:VanEck Vectors Gold Miners ETF (GDX)

Recently, the gold and gold mining stocks have surged higher over the past three weeks. The highly followed Market Vectors Gold Miners ETF (NYSEARCA:GDX) jumped higher by more than $4.00 a share since May 29th, 2014. Today, the Market Vectors Gold Miners ETF is trading lower by 0.37 cents to $25.90 a share. The GDX is now overbought on a daily chart, so a pullback over the next couple of days to weeks should be somewhat expected. While a pullback is possible, traders and investors must now keep an eye on the weekly inverse head and shoulder pattern that is forming on the chart. A weekly chart close above $26.00 a share on the Market Vectors Gold Miners ETF would trigger a buy signal for the pattern. The target for the bullish inverse head and shoulder pattern indicates a move up to the $35.00 area.

Leading gold mining stocks such as Royal Gold Inc (NASDAQ:RGLD), and Goldcorp Inc. (NYSE:GG) also have the same weekly chart head and shoulders pattern as the Market Vectors Gold Miners ETF (NYSEARCA:GDX). Please understand that these patterns have not yet triggered, so until they do these equities could still be somewhat volatile in the near term.

Nick Santiago

InTheMoneyStocks.com

Stocks: GDX