Are Junior Miners Overbought or Oversold?

Source: Stewart Thomson 01/29/2025

Newsletter writer Stewart Thomson addresses the interesting question of whether junior mining stocks are overbought or oversold.

Junior GDXJ and SGDJ-style gold stocks face what is basically a four-events gauntlet this week:

Today is the Fed meet and speech from Chair Jay Powell, Thursday is the GDP report, Friday is the PCE inflation report (the Fed’s favourite), and Saturday is the Indian budget (there’s gold tariff tax hike risk and all investors should cheer for a cut!).

Here’s a look at the key buy and sell zones for those miners, basis gold bullion:

For gamblers, $2735-$2700 is the buy zone for the GDXJ and SGDJ style/component stocks. For investors, it’s $2660, $2582, and $2550.

Here’s a look at the spectacular GDXJ weekly chart:

The technical setup is awesome, and it implies a surge to $75-$100 is not only likely . . . but has already started.

Here’s an interesting chart, which is the SGDJ ETF versus GDXJ:

SGDJ has struggled against GDXJ over the past decade. Why?

Answer: Most likely because it has more “raw” (smaller) juniors as component stocks, while GDXJ is arguably akin to a watered-down version of GDX, with lots of intermediate producers.

Possible basing action is occurring for SGDJ vs GDXJ, and that’s in sync with potential “rally time” for the CDNX, which is where the most exciting junior miners tend to trade.

Here’s a look at the CDNX daily chart:

Lucky number five?

Naked shorting is rampant on the CDNX. All YOU can do is cheer that the bank and Bilderberg scum ordain price through there (630) while following the gridline rules and caveats:

Investors need to be careful about how much capital they allocate to a junior situation, regardless of how good it fundamentally, cyclically, and technically appears. Big players that dump stock can change a bullish chart to a bearish one quite fast.

Let’s take a look at one of the component stocks of my “Thunder Down Under” (Australia) portfolio:

There’s a subtle difference between forecasting where a stock may go ($7.50 in the case of EVN) and buying or selling based on that forecast. Basis ironclad horizontal support/resistance (HSR) and capital movement rules, the $5.50-$6.50 zone is one for partial profit booking . . . and it coincides with $2790 for gold.

How much an investor sells in the $5.50-$6.50 zone depends on where they sit on the investor-gambler scale. Gamblers would typically start selling near the top of the range, at around $6.50.

Investors are more conservative. While the mainstream adage is “Time in the market reduces risk,“ my adage is “Time in a war increases your risk of getting shot!” . . . and the market is, in large part, a war.

Here’s a look at a very exciting situation with Goliath Resources Ltd. (GOT:TSX.V; GOTRF:OTCQB; B4IF; FSE):

Is Goliath overbought?

That’s a great question. The answer is that it’s overbought on this daily chart after a couple of flagpole-style surges, but let’s take a look at the latest news:

Here’s a chart that should put everything in perspective:

On this monthly chart, Goliath is the opposite of overbought. It’s breaking out of a base pattern! The bottom line is that Goliath (which operates in the solid jurisdiction of British Columbia) is at a point where some short-term profits can be booked, but pullbacks can likely be bought with significant confidence! It’s an exciting time for junior mine stock investors, and just as David was able to take on Goliath with a slingshot thousands of years ago, today’s investors could do very well with this Goliath . . . with just a modest slingshot of investment capital into the stock!

Special Offer for Streetwise Readers: Please send me an Email to [email protected] and I’ll send you my free “Hot Juniors Get Hotter!” report. I highlight key junior miners trading under $1 . . . some with “blastoff gap” action in play! Solid investor tactics are included in the report.

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Important Disclosures:

1. Stewart Thomson: I determined which companies would be included in this article based on my research and understanding of the sector.
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Stewart Thomson Disclosures

Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualified investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:

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Source: https://www.streetwisereports.com/article/2025/01/29/are-junior-miners-overbought-or-oversold.html