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<\/p>\nGold bugs were happy last week.<\/p>\n
The price of the shiny yellow metal rallied almost $70. Gold closed Friday at its highest price since mid-February.<\/p>\n
Gold stocks did even better. The VanEck Vectors Gold Miners Fund (GDX) gained almost 12%.<\/p>\n
And, here’s the good news… there’s still more upside ahead.<\/p>\n
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. <\/p>\n
But, the action looks constructively bullish. And any short-term weakness should lead to another push higher in the days ahead.<\/p>\n
Look at this chart of GDX…<\/p>\n
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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.<\/p>\n
That’s the same sort of action I expect to see this time around.<\/p>\n
Some technical indicators, like the 5-day Relative Strength Index (RSI)<\/a> and the Commodity Channel Index (CCI)<\/a>, 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.<\/p>\n 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.<\/p>\n So, here’s what I’m looking for…<\/p>\n GDX needs to consolidate or drift lower to allow the 9-day exponential moving average (EMA)<\/a> – 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. <\/p>\n That’s where traders should be looking to add exposure to gold stocks in anticipation of another move higher.<\/p>\n Best regards and good trading,<\/p>\n Jeff Clark<\/p>\n P.S.<\/strong> Before you go, let me put something a little different on your radar…<\/p>\n 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.<\/p>\n 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.<\/p>\n 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.<\/a><\/p>\n![](\"https:\/\/casey-assets.s3.amazonaws.com\/images\/misc\/jeff-clark-signature.png\")
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