Let’s bookend Scott’s swing trade on $GDX – March 8, 2022
GDX GLD
This is Scott with your Chart of the Day. I want to follow up on Gold ( NYSEARCA: GLD ) and GDX ( NYSEARCA: GDX ). Now, GDX ( NYSEARCA: GDX ) has been a trade that we have been riding over at Stock Market Mentor for a while. We have been talking about gold, metals and mining, and the like, since the middle of February.
Today I ended up taking profits on my GDX ( NYSEARCA: GDX ) trade, coming out of this nice downward sloping trendline. You can see this long base of consolidation, we got a breakout, I ended up trading in and around a position where I sold some here, bought back here, and then I sold the last of my position today.
Now, we were suggesting to members to watch the $40.00 level. And you can see how we just kind of crept above that $40.00 zone, only got there for just a minute, and then came back down. And so we said to watch for a little bit of a speed bump over around $40.00. And that is because if you zoom out here you can see GDX ( NYSEARCA: GDX ) actually has some price history from last May and June, where we really couldn’t even break that $40.00 level for more than, again, a minute.
And so now we are back at the scene of the crime and you can see how GDX ( NYSEARCA: GDX ) is quite extended here. And so I used this extension day as an opportunity to lock in my gains in GDX ( NYSEARCA: GDX ). I am happy about this trade, great trade. Did I trade it perfectly? Probably not, I probably should have put my entire account in the trade down here. But this has been kind of a weird trade lately, as you see, it’s been a lot of ups and downs.
At some points, you think it’s going to get going, and then it gets rejected. I was really focused on position sizing and managing my risk within this trade. I think I did an okay job where I bought here, for the most part, rode some of this, sold here, bought back, rode it all the way up, and then sold out of it today.
As an active swing trader I am going to give myself, probably, an A- on this trade but definitely a successful one. And when you are in a market like we are in right now where getting nice trends to ride for a couple of days is hard, I have no complaints about GDX ( NYSEARCA: GDX ).
Now, I will say there is some potential that this is not a short-term top, that this is just maybe a trading top on GDX ( NYSEARCA: GDX ). Because if you look at GLD ( NYSEARCA: GLD ), GLD ( NYSEARCA: GLD ) closed pretty strong on the day and on good volume here.
So what I would like to see, ideally, is just some sideways consolidation, maybe a little base of consolidation right up here for a couple of days, go sideways, let the moving averages come back up, and catch up to price here on GDX ( NYSEARCA: GDX ) and maybe we’ll get a chance to reload and continue to ride this trend. Because on the weekly chart, the trend is still intact and it is still above all the major moving averages, albeit a little extended.
So you definitely want to keep an eye on Gold ( NYSEARCA: GLD ) and the gold miners for potentially a little bit of a retracement, a little bit of a reload spot, and then, once again, off to the races. You definitely want to keep a watching GDX ( NYSEARCA: GDX ), although, I did take profits today.
I hope that you were able to take some of these trades that we have been talking about in terms of metals and mining, gold, etcetera. It’s been a great trade and definitely a sector that we should keep watching just in case it decides to continue higher.
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