All of the action in the Market Vectors Junior Gold Miners ETF (GDXJ) since the March 7 high at 41.00 exhibits a series of higher lows juxtaposed against lower highs. In other words, the pattern is a contracting consolidation or coil formation.

As long as the very near-term series of higher lows remains intact by prices remaining above 38.60 on any weakness, the integrity of the pattern will remain intact and continue to put upward pressure on key resistance at 39.80-40.20.

A hurdle of 40.20 should trigger upside continuation that revisits 41.00 quickly. Conversely, a break below 38.60 should trigger a retest of the prior key pivot low at 37.69

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.