The chart is fairly self-explanatory. Huey is settling a little this morning after a strong start and could fill the opening gap and still remain on track for the noted targets of 300 (#1) and 320 (#2) that traders would be looking for (if they haven’t already sold a nice pop).
All too often during the bear cycle these ‘normal’ pullbacks have become ‘abnormal’ very quickly. While this is always a possibility, the fury of the capitulation the other day argues that this bottom attempt could have more to it. But for safety’s sake, know that if the gap fills and HUI continues to go below 264 or so, the prospects for a test of the lows or a rally failure will be increased.
Consider this update a little road map to the upside and the downside for HUI’s short-term prospects. I continue to believe that fundamentally engaged investors will probably be rewarded for buying high quality items (which I personally define as the top royalty plays, proven younger producers only the most cashed up and/or resource laden explorers) on the capitulation 2 days ago.
Meanwhile, we move forward with the idea that a trade is in progress with any confirmations as to whether or not it is a new bull market still out in the future.
[edit] Due to a subscriber’s question I want to highlight that “if the gap fills and HUI continues to go below 264 or so, the prospects for a test of the lows or a rally failure will be increased” means on a closing basis. It is going to jump around in-day and as long as nothing impulsive goes on to the downside, that in itself would not violate the parameter. Apologies if the wording was not very clear. Sometimes these updates are not conducive to getting every word in there that could be. That is why you are always welcome to send questions (contact link above or the ‘biiwii.com’ email) if anything is unclear.
