Gold Miners ETF (GDX) Trade Idea
There are sparse ideas to the long side according to the traditional Trade Ideas scans this week. After some damage was done last week in the major market indexes, this week we are seeing more defensive data showing up in a simple sector scan looking for ETF ’s that are close to making new 20 day highs. As you can see in the Toplist below, only Gold, Silver and Treasury Bonds are holding up well in this uncertain technical environment.
ETF Trade Idea on GDX
The daily chart of GDX shows a breakout from a down trending wedge on the daily chart. The Trade of the week in GDX will be live with a print above 23.20. There is a possibility this ETF may gap up on the open. We would not suggest chasing any open above 23.42 but let the price pull back to 23.42 for an entry if that happens. The suggested stop in GDX would be a trade below. 21.95. The potential target will be 25.75. An ideal 1:2 risk/reward position trading setup.
Footnote: This is a table showing the maximum profit for past 2017 Trades of the Week. Timing the top is impossible but this table shows how much alpha was possible when considering your personal exit of these positions. The trades outlined in red eventually hit their suggested stop prices, so you can see the importance of timing and harvesting profits along the way when you can, especially those that move above 10%. We will update this table when needed to bring data more up to date.
TOW Rules: 20% Rule. If a performance is up 10% and gives back 20%, take the 8 and run. (Profit Save, Trailing Stop).
Stocks that gap up over the entry price are considered up to the discretion of the buyer as to the entry price (WETF)