GDXJ has an inverse H&S bottom on its long-term charts (red neckline). It’s also formed a megaphone off the bottom (blue) and just put in the retrace to VWAP that makes the megaphone legal for an upwards breakout.
That means GDXJ could head straight up from here for a breakout from the inverse H&S, with a target of roughly 100 (green scenario).
The purple scenario represents a triangle right shoulder on GDXJ’s inverse H&S, with follow-through on a larger inverse H&S set-up.
The orange scenario represents a breakdown through the blue megaphone VWAP for a new low near zero. The odds of this are extremely small.
The pink scenario represents a false breakout through the red inverse H&S neckline to put a megaphone right shoulder on the formation. If you see GDXJ reenter the inverse H&S after a small breakout, get ready to buy the dip just below 25.
The longer GDXJ spends down here forming a right shoulder, the more likely it is to break out quickly through 100 when it finally heads up.