Gold mining stocks have woken up and may soon rocket to new 52-week highs. Here’s a simple walk-through of two hot gold mining stock charts setting up for potential buy entry now. The SPDR Gold ETF (NYSE:GLD), which mirrors the price of spot gold, drifted in a lazy, sideways range throughout all of 2021.
However, GLD recently jumped to a fresh 52-week high after the Russia-Ukraine war broke out in late February of 2022. Individual gold mining stocks have been following a similar pattern, heating up alongside the price of spot gold.
Here are the ideal buy entry points to profit from two top gold mining setups.
1. Gold Miners ETF
VanEck Gold Miners ETF (NYSE:GDX) has been consolidating near its 52-week high for the past four weeks and is now poised for a breakout to new highs. GDX is an exchange-traded fund that consists of a basket of individual gold mining stocks.
Notice the bullish price consolidation on the weekly chart of $GDX below.
Next, let’s zoom in to the shorter-term daily chart to determine an appropriate, low-risk buy point.
On Mar. 29, notice that GDX gapped down and undercut an eight-day low formed a bullish reversal candle, and closed back above its 20-day exponential moving average. The bullish reversal off the lows is a buy signal, with the entry trigger above the high of the reversal candle (above $38.25).
Notice how the 10-day moving average (green line) also converges to provide support at the same level. A buy entry near the current price ($38 to $38.50 area) may be ideal. A protective stop can be placed beneath the low of the Mar. 29 reversal bar, as the price should not revisit that area.
We will send a trade alert to Wagner Daily subscribers with our exact trigger, stop, and target prices if/when we buy GDX in the Morpheus portfolio.
2. Gold Fields
Gold Fields (NYSE:GFI) is a leading gold stock that also formed a bullish reversal candle on Mar. 29 and is also setting up for potential buy entry now. The reversal bar undercut the prior swing low and three-week low before closing back above the 20-day EMA.
As with the GDX trade setup, the proper buy trigger for $GFI is above the high of the reversal bar day ($15.33). GFI traded above its 10-day moving average on Mar. 31 but failed to close above it. However, the price held above the 20-day EMA, which is just above the high of the reversal day.
An entry near the current price may be an ideal buy point for swing trade entry. Like the ADX setup, a stop can be neatly placed below the low of the reversal bar day. Again, we want to immediately exit the trade if the price drops back down to that level.