Bullish Leveraged Gold ETFs Get Hammered – A Pullback Warranted?
Given the large gains seen over the last two days, there could be support in the cards for leveraged minor ETFs following profit taking. NUGT, Direxion Daily Gold Miners, is the 3x leverage of the Market Vectors Gold Miners ETF (GDX).
Price action is heavily to the downside, reaching support at $9.11 – forming a triple-bottom on the two-hour chart. Price visited this level on December 16 and 24, and NUGT is currently treading water. A short-term pullback is probable given the steep oversold condition, with the RSI at 16. The – DMI has ticked lower, signaling that downside could take a breather. However, the ADX is still sloping upward which is indicative of strong trend continuation.
Next, the underlying benchmark GDX is showing the same negative sentiment. The chart, in many ways, is similar to NUGT. If the gold miners ETF can rally to the targeted resistance level of $18.46, this would represent a 9.51 percent increase in NUGT, or a move to $9.98 and just shy of the $10.08 resistance level. If prices can extend to the second resistance target of $18.74, NUGT could potentially extend to $10.33.
Conversely, there is the likelihood that the intraday trend could continue lower. In this case, if GDX were to trade lower to the first support level of $17.55 then NUGT could move lower to $8.37 and break the triple-bottom support. A larger move to $17.35 would reflect a 28.5 percent loss in NUGT, causing the bearish ETF to fall to $6.48.
As always, intraday charts are vulnerable to significant volatility caused by headline risk and potential outlook is only suitable for the next few trading sessions.
See full post here: bullion.directory/bullish-leveraged-gold-etfs-get-hammered-a-pullback-warranted/
Price action is heavily to the downside, reaching support at $9.11 – forming a triple-bottom on the two-hour chart. Price visited this level on December 16 and 24, and NUGT is currently treading water. A short-term pullback is probable given the steep oversold condition, with the RSI at 16. The – DMI has ticked lower, signaling that downside could take a breather. However, the ADX is still sloping upward which is indicative of strong trend continuation.
Next, the underlying benchmark GDX is showing the same negative sentiment. The chart, in many ways, is similar to NUGT. If the gold miners ETF can rally to the targeted resistance level of $18.46, this would represent a 9.51 percent increase in NUGT, or a move to $9.98 and just shy of the $10.08 resistance level. If prices can extend to the second resistance target of $18.74, NUGT could potentially extend to $10.33.
Conversely, there is the likelihood that the intraday trend could continue lower. In this case, if GDX were to trade lower to the first support level of $17.55 then NUGT could move lower to $8.37 and break the triple-bottom support. A larger move to $17.35 would reflect a 28.5 percent loss in NUGT, causing the bearish ETF to fall to $6.48.
As always, intraday charts are vulnerable to significant volatility caused by headline risk and potential outlook is only suitable for the next few trading sessions.
See full post here: bullion.directory/bullish-leveraged-gold-etfs-get-hammered-a-pullback-warranted/
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