GDX Optix reversed from an extreme

 

Following a sharp rise from early fall into January and a reasonable pullback, many believe that gold stocks are poised for another significant leg up. And given the volatile nature of this sector and its current oversold status, it is possible. Still, several objective indicators suggest this admittedly intriguing sector may struggle in the months ahead. GDX Optix reversed from an extreme: Gold stock trader optimism understandably rose sharply as GDX rallied from September into January. Unfortunately, it may have gotten a bit overdone. The chart and table below highlight those times when: The 50-day average for GDX Optix dropped below 60 While GDX was above its 150-day moving average GDX Breath signaled an overbought condition: The chart and table below highlight when the GDX Breadth (% > 200 Day Avg) indicator was above 94%. The most recent unfavorable signal occurred on 2023-01-26, and the results above also suggest the potential for poor GDX performance as 2023 progresses.