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Chart 1: GDXJ Chart w/ Breadth Indicator
This is a simple line chart of GDXJ but I included some stats from a quick breadth check. I looked at 47 juniors (both large and small types) and checked if they were trading above various moving averages at the December 2016 low as compared to right now.
Let's focus on the data for the 50-dma and 200-dma. At the December 2016 low the percentage trading above the 50-dma and 200-dma was 2% and 9%. Right now? 19% and 28%.
If gold stocks go to the Dec 2016 lows (which depending on the index you use could be anywhere from 8% to 12%), those breadth figures should come down another 10%-15%.
Late Saturday evening, we published TDG #558, a 29-page update which covered, among other things, updated strong buy price targets for a number of companies, notes on two silver companies we don't own yet but are very high on our watch list, and we answered a subscriber question about one of our holdings becoming a go-to stock in the next silver bull market.
If precious metals make a major breakout and Silver reaches $27/oz, the two companies have a great chance to be 4-baggers. Of course, we are just as optimistic on the silver plays we already own.
We are very confident that if the HUI makes a new low and other indices do the same or test their lows, the sector will be ready for a big rally. With breadth indicators going to 10% or below, that shows that the entire sector is oversold. When that happens it sets up at the least, a sizeable rebound because everything that is oversold then bounces at the same time. So we will be watching our breadth stats in addition to sentiment indicators like the CoT, put-call ratios and the
DSI.
We are going to see some very good values potentially turn into excellent values over the weeks ahead.
Subscribe to our service and find out which juniors are great values and have massive potential over the next 12-18 months. (And we answer subscriber questions).
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You nearly always read the trends and support and resistance extremely well. Please keep us posted if or when the outlook seems to change. which you always do of course. TDG is the most valuable resource for understanding what is possible to understand about the PMs.
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I have been a subscriber since late last year and just wanted to say thanks. You are the best analyst for gold stocks that I have found. (And I have been around for quite a while : ) )
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Disclaimer: This newsletter is intended for informational and educational purposes only and should not be considered personalized and individualized investment advice. Investment in the precious metals sector contains significant risks. You should consult with an investment advisor and do your own due diligence before making any investment decisions. This email may contain certain forward looking statements which are subject to risks, uncertainties and a multitude of factors that
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