Gold Mining Stocks: Spectacular Chart, Bear Market Resistance Test Ongoing

| About: VanEck Vectors (GDX)

Summary

Gold at an inflection point.

Gold mining stocks at a secular breakout level.

The coming 3 weeks are crucial for gold and miners.

Gold mining stocks (NYSEARCA:GDX) had a great performance in January after they lost 43 percent since they topped last summer. InvestingHaven's research team noted that gold is one of the 5 leading markets at an inflection point right now. Not coincidentally, gold mining stocks are also at an inflection point. They are about to test their bear market resistance price point. This is a very important moment in time for gold investors.

As reported before gold tends to move in channels, both up (bull markets) and down (bear markets). Analyzing the price of gold (NYSEARCA:GLD) should always happen in the context of falling or rising channels. Right now, gold is near a very important test: $1260. Likewise, gold mining stocks are about to test an even more important price level than gold: 26 points in the GDX ETF.

Gold and mining stocks tend to overshoot their channel, as seen in the fall of 2015 and the summer of 2016. That was really under extreme bullish or bearish sentiment. At this point in time, sentiment is not really extreme in the gold market. InvestingHaven's research team expects either a breakout or gold mining stocks to be stopped cold, between 26 and 28 points.

A break above 28 points would be incredibly bullish, and would mark a turnaround from a bear to a bull market in gold mining stocks. However, if the 26 to 28 level will appear to be too hard to overcome, the falling trend lines will be tested in the coming months.

Gold investors pay higher than average attention on the coming 1 to 3 weeks.

This article originally appeared on InvestingHaven.com.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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