In this week’s letter it was mentioned that a safer buy point on the gold stocks (as represented by the HUI index) would be with a DAILY chart move above the 50 day moving averages and a MACD up-trigger.
It was also mentioned that bottom feeders like myself would probably not wait for such a signal before taking a try on select positions. While I am 100% cash in the speculative portfolio, any bounce attempt that takes place above the 217 parameter is one that I want to watch. Hence the micro view of HUI using a 60 minute chart:
The chart says it all; 217.25 is the line in the sand to the series of higher highs and higher lows out of the June bottom. I may take a try on some quality positions (as represented in the model portfolio) today. These might be the likes of RGLD, SLW, AG, etc.
The general ‘stop loss’ on such a move would be the 217 parameter. Again, I must stress that the daily chart signals are negative and people who value comfort and longer term positioning should probably wait for a confirmation that the 217 low is going to hold. After all, any real rally would have much more upside beyond the 50 day moving averages.
Posting may be lighter than usual today as I have got some non-market related things to attend to.