Friday, August 28, 2015

GDX Call Option - Gold Stocks Set to Rally Big

Click on Chart to Enlarge

This chart is GDX, the gold miners ETF.  It is showing a very strong bullish divergence in the money flow index, which at significant bottoms tends to be a leading indicator.  See the green circled areas for the last 2 set-ups in the money flow index like this.

Additionally, doing any quick searching on gold seasonal price movements shows the September time frame as a positive trade, and gold is generally strong from Sept through December.

Additionally, the smart money has recently moved to a historically extreme bullish position, suggesting a price support level has been hit at the recent lows in gold.

I plan to enter a December 13 call option on GDX tomorrow.  I am placing a limit order of 1.90 initially.  Currently the ASK is at 2.00.

Once entered I would set a limit order to exit of 6.00 or 300% gain from entry price.

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