Precious Metals Miners Setting Up For A Breakout Rally – Wait For Confirmation

brass metal frame

Precious Metals have continued to slide sideways as the US stock markets rallied into the FOMC meeting last week. Not by coincidence, metals have continued to base/bottom near recent lows as concerns about the global debt/credit markets, central banks, and precious metal supplies continue to linger.  The US Fed indicated it will do whatever is necessary to support the recovering economy.  The question my research team asks in relation to the basis for a move in metals/miners is “do the global markets believe the global central banks still have control of the underlying global banking/credit markets well enough to prevent another massive rally in metals?”.

This question should be first and foremost for metals precious metals enthusiasts.  Recently, there has been quite a bit of concern related to a Silver Squeeze and COMEX deliveries. Currently, there is some speculation that the Perth Mint has a very limited supply of physical metals on hand and nearly 60x that amount on their balance sheets (source). We’re no expert related to this lack of physical inventory, but if it is true, then a breakout rally in metals (a true metals squeeze) could be just days or weeks away.

Wait For Confirmation of Miners' Bullish Breakout

The charts we are including in this article suggest “Wait For Breakout Confirmation” because we believe the current technical/price setup may prompt a bit of an extended bottoming formation.  If and when the breakout in miners happens, the upside price move could be very quick and efficient.

The Weekly NUGT chart, below, shows how well price has consolidated near the $51 level and how the extended downside trend line (originating from the 2016 peak) aligns with the current price level.  Our researchers believe once this trend line is breached to the upside, NUGT may attempt a rally to levels above $108, the 0.618 Fibonacci Price Extension level, fairly quickly (possibly within 3 to 6+ months).  The $146 target level, a full 100% Fibonacci measured move, would represent a massive +167% price rally in NUGT (if it happens).  Quite literally, this breakout setup could be very explosive if and when it happens.

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