Новости рынков | September rate hike more than 50% probability

" We still view the first US rate hike as potentially being a buying opportunity and maintain our end of year call for gold at $1,275/oz."

I view this trade as tactical in nature and short-term in duration, which is to say that any bullish reversal, i.e. a capitulation of the bears on at least a daily closing basis, would be the trigger to try the GDX from the long side for a good oversold bounce.



Management and risk description

Given the extreme bearishness in gold and gold mining stocks at the moment, it is important not to jump the gun on taking the other side of this consensus. The next major bullish reversal day would be a good spot to try an oversold bounce to squeeze the bears.

Parameters

Entry: Buy the GDX CFD after a bullish reversal day and a daily close above the $15 area.

Stop: At the lows of the triggering bullish reversal day, no lower than $14.

Target: $16.20.

Time horizon: 2 — 3 weeks, once the trade is triggered.

Looking at the long-term chart of the Gold Miner Index (GDX:arcx) we see that last week's selling pushed it below support that stretches back to the financial crisis lows of 2008.

While Technical Analysis 101 dictates that such a violation of major support is bearish, empirically there are also plenty of examples of such moves resulting in fairly swift breakdown/fake-out moves that over the course of a few days or weeks saw a fairly violent reaction back higher.

From a momentum perspective, note that while the price continues to drop lower, the RSI index at the bottom of the chart is so far still making a series of higher lows and thus flashing positive divergence, which is a bullish sign at the margin in and of itself.



Zooming in on the daily chart of the GDX ETF, then, we see that the selling since mid-May has been relentless with exception of the occasional one-day oversold bounce. The most recent selling has also pushed the ETF well below its eight and 21-day moving averages and the stochastic oscillator has been in oversold territory for months… a long stretch of time to be in oversold.