GDXJ Breakout

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“Someone I admire once said, ‘You have to know the rules so well that you know when to break the rules, and how to break the rules well.' For me and my usual sector concentration limits, this is a moment where I’m breaking the rules.”

The above was a very insightful post yesterday by a member of the Hit & Run Twitter feed.

He was referring to the precious metals we have been long and added to yesterday.

I agree there are times when the trading rules are made to be broken and it pays not to look too closely at a chart.

This looks like it may be one of those times when we are looking into the whites of the mining stocks' eyes.

GDXJ, the junior gold mining index, exemplifies the position of the miners.

It is up more than 100% off its March low and hovering just below its February high.

Yesterday GDXJ came out of a high, tight Bull Flag.

The flag is within the context of a continuation inverse Head & Shoulders pattern.

The breakout over the 3 point Neckline triggers a Rule of 4 Breakout projecting to 47.

With next week being the May monthly option expiration, it looks like Pin Action to 50 may be on the table if GDXJ clears 45.

Pos GDXJ, GDXJ calls

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