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Talking about “Stinking it up,” Gold mining stocks (GDX) have underperformed the S&P 500 by over 50% in just the past two years.
I shared this chart to Premium and Sector Sentiment Extreme members a few days ago, reflecting that GDX is on a support line and is creating a bullish falling wedge of late (two-thirds chance of moving higher), during its 14% decline in just the past 90 days!
If a person believes in the “Buy low and hope to sell it higher” concept, GDX looks to be at a price point that one could buy GDX with a stop below support. No doubt if GDX breaks support, it could fall another 10% if not more and that is why you want a stop below support!
Good risk reward entry point? Stay tuned!