GDX Breakout

GDX, Market Vector Gold Miners ETF, broke out of the recent resistance level ($38-39) on a very powerful volume yesterday, and continues its run today. Now where is it going?

This is 3-year daily chart of GDX. It seems it is back to hitting the longer-term upper limit, before the huge run-up from August 07 to May 08.

The current ascent from the October 08 low is very steep. It may backtest the recent resistance level, which happens to be where the trend line from recent highs intersects. The real test will be to see if it then stays above the level.

With macro situation getting murky again, investors are buying hard asset stocks - companies that dig them from under the ground, as well as assets themselves. So who knows what will happen to GDX? I wouldn't be surprised to see it go all the way back to the May 08 high, making an extreme V-shape recovery.

I'm still holding my minute position on GDX.