My team of traders have seen signs that gold is forming a bottom, including massive buying by the “smart money” in the futures market.
Now, they’re see another reason to add exposure to gold to your portfolio: Mining stocks are forming a bottom.
The VanEck Vectors Gold Miners ETF (NYSE: GDX) owns stocks in a group of mining companies. The ETF recently completed a head and shoulders bottom pattern on the chart (shown in red lines).
This pattern is highlighted in the chart and the recent break of the neckline (shown in green) provides the buy signal.
Based on that pattern, look for a quick run up in price.
The price target is $20.40, a 7% gain.
To play this move, my traders suggest buying the October 19 call options for about $0.30 and a potential gain of more than 300% if GDX reaches its price target.
© Chart courtesy of Today’s Profits. All rights reserved.