Gold bugs were happy last week.

The price of the shiny yellow metal rallied almost $70. Gold closed Friday at its highest price since mid-February.

Gold stocks did even better. The VanEck Vectors Gold Miners Fund (GDX) gained almost 12%.

And, here’s the good news… there’s still more upside ahead.

Yes, after a blistering one-week rally, gold and gold stocks came into this week in overbought territory. Gold pulled back about $20 on Monday. DX has fallen about 2% from Friday’s closing price.

But, the action looks constructively bullish. And any short-term weakness should lead to another push higher in the days ahead.

Look at this chart of GDX…

The recent rally looks a lot like the rally in GDX in late January. Most indicators got overbought back then, and GDX drifted lower for several sessions. Then we got another pop higher.

That’s the same sort of action I expect to see this time around.

Some technical indicators, like the 5-day Relative Strength Index (RSI) and the Commodity Channel Index (CCI), stretched up to nosebleed overbought levels on the back of last week’s rally. But, traders should notice that there isn’t any negative divergence on any of the indicators. In other words, as GDX rallied last week, all of the technical indicators rallied right along with it.

That’s a sign of strong momentum. And, it usually means that any short-term decline that relieves the overbought conditions should be followed by another move higher.

So, here’s what I’m looking for…

GDX needs to consolidate or drift lower to allow the 9-day exponential moving average (EMA) – the red line on the chart – to catch up to the current price. Currently, the 9-day EMA is near $22.20 and rising. So, a dip towards that level, or even slightly lower, seems reasonable. 

That’s where traders should be looking to add exposure to gold stocks in anticipation of another move higher.

Best regards and good trading,

Jeff Clark

P.S. Before you go, let me put something a little different on your radar…

Tonight at 8 p.m. ET, my colleague Jeff Brown will reveal his biggest tech predictions for the coming years. I got a sneak peek, and I must say… These are things the talking heads haven’t even considered yet – truly world-changing.

I have a lot of respect for Jeff. He’s constantly on the road, attending elite technology conferences… Speaking with world leaders and fellow technologists… And picking up on not just “the next big thing,” but what comes after it.

What he has in store for tonight fits that bill. And anyone who invests in his recommendations now stands to make a fortune in the next few years. You can sign up for the event right here.

Reader Mailbag

In today’s mailbag, readers continue to share their thoughts on Jeff’s D-Day essay…

What a moving story. Thank you. It all seems so incongruous in today’s reality, so unreal. How many graves and grateful locals are there in all the far-flung places across the globe where American soldiers have died since “The Last Great War.” And today, do we Americans really know of care aside from our professional military community?

What a beautiful experience you had with your family. Again, thank you. Now back to making money. Alas, but at least you gave me a meaningful moment.

– James

Thanks for the remarks about Normandy! I’m still trying to get people to stop saying “Happy Memorial Day.” That day and the day of the Normandy invasion are hallowed days in our history and I consider them a solemn memorial to our brave, determined troops.

– Bob

Thank you, Jeff, for sharing your story with us! Brought a tear to my eye…

– Rosemary

Thanks for this. It’s a good reminder for us old folks as well as the young who have never lived through a war like that.

– Don

Loved your comments about Normandy today. I was there a year ago and was so surprised to see so many American Flags flying in the northern France communities.

– Jeannette

Thank you for your respectful and appropriate commentary on the 75th anniversary of D-Day. In an age of social-media outrage, it’s nice to hear a sane message.

– Mark

Hello Jeff, I read about your visit to Normandy. Very impressive. I had the same thoughts when I visited the American Cemetery 25 years ago at the 50th anniversary. Thanks America!

I go to Luxemburg four times a year and every time I visit the American Cemetery there, where thousands of Americans rest who lost their lives during “The Battle of the Bulge.” These boys rest there together with their general. They gave their lives for our freedom. I never forget!

– Chris

And a couple of Jeff Clark Trader subscribers thank Jeff for a recent trade…

On my first trade, I made 100% in two weeks and still have half of my trade open. Thanks. Keep them coming.

– Josh

Keep up the good work Jeff. I’m looking forward to the next profitable play and seriously considering a lifetime membership.

– John

Thank you, as always, for your thoughtful insights. We look forward to reading them every day. Keep them coming at feedback@jeffclarktrader.com.