HUI has dutifully stopped at our projected 280+ resistance area. This was no great call because it always was going to at least hiccup there. Now, we see where it finds support.
The daily chart shows two support areas at or above which a healthy correction can find support prior to a new advance. 240 (+/-) is now the parameter point to what is healthy or problematic. Below 219 is a lower low, and that is the ultimate caution parameter to people buying the rally on pullbacks.
Again, after the impulsiveness of recent upside events, I do not think that is in play. But we cover all potentials nonetheless.
Bottom Line
260 or above is the preferred support level.
240 is a very valid support as well, and this would clean out a lot of the momo traders that came in. It would be healthy and test the SMA 50 to boot.
Below 240 raises caution and below 219 calls the entire bottom process into question. Bull markets and healthy rallies make higher highs and higher lows.
A rise and hold above the resistance line targets the mid-300’s [edit to clarify, 350 +/-]
