The Junior Gold Miners ETF (GDXJ), fell to lows near $43.06 recently, which matched the low from the end of March 2021, near $43.24. Although these lows are not exactly the same, the span of time between these unique lows and the very close nature of them makes them a Double Bottom setup.
It is very likely that this support level will prompt a new upside price rally in Junior Miners targeting $50 to $52 or higher if the support level near $43 continues to hold.
GDXJ MAY BE STARTING A RALLY TO $55 OR HIGHER
This could be a very exciting rally for Junior Miners and Precious Metals. After nearly a year of metals and miners drifting lower and sideways, this Double Bottom pattern may prompt a fairly strong rally leading both Precious Metals and Miners up the next rally phase high.
This GDXJ Weekly chart shows the Double Bottom near $43 and shows an early rally phase that may have already started in GDXJ. If price rallies above $47.50 on strong upward momentum, it will likely attempt to rally above $55 and retest the recent highs from May 2021.
If our research is correct, this move would likely see the US Dollar weaken and Precious Metals attempt to rally. That type of move would push Junior Miners much higher over the next few months.
If GDXJ falls below the $43 Double Bottom level, then we may see even deeper downside price trending for Metals and Miners – possibly targeting previous support near $39.50. Miners have been moving sideways in a defined downward price trend since the peak in August 2020. If Miners were to break below the $43 support level, it would likely happen at a time when the global markets were also under moderate pricing pressure – resulting in a fairly deep broad market pullback.
Have a great day!
Chief Market Strategist