One of the most “out of favor/uncrowded trades” at this time is taking place in the mining stocks sector, which have been hit very hard the past 6 months. The metals and mining ETF (GDX) is down 30% since its 2011 highs, a much bigger decline than Gold and the S&P 500 have experienced over the past 6 months.
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GDX created a large bullish wick at support last week and is attempting to break a steep falling resistance line, with sentiment levels reflecting very few metals bulls!
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Gold finds itself on a potential support line at the same time the number of Gold bulls has reached levels seldom seen the past 4 years.
Oversold bounces often take place when few investors expect a rally to happen… when it comes to the metals complex one thing is for sure right now, very few expect a rally to take place!
