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A couple of patterns in the mining arena caught my eye this morning.
The junior miners ETF (GDXJ) has been lagging GDX and remains inside of a falling channel over the past few months, creating a series of lower highs and lower lows. At this time GDXJ is close to the top of the channel and finds itself on a key support line.
Silver Wheaton (SLW) looks to be forming a “right shoulder” at the top on a rather sizable bearish rising wedge pattern.
These patterns would suggest that owners of metals stocks might want to be pretty protective of values with these patterns at hand and have some tight stops in place, because if these support lines at a right shoulder give way, the decent down, could be pretty steep!
Check out what happened to a major market index at right shoulder resistance, a little over a month ago, that had a very similar pattern to the SLW pattern! Looking back I wonder if some wished they had harvested or added protective stops? (see post here).
