Let’s keep it simple. The gold stock sector is acting very nicely as an anti-market to everything else that is going down of late. It is a microcosm of the big picture in which we’d expect this counter cyclical sector to grind out a bull market as the other stuff tops out and enters a bear market. Said bear market is not (yet) indicated in the broad stock market, although the indexes have come close to the December lows.
We noted that the 170 level was the first area HUI had to get through and 180 was the second. Check and check. A rise above 180 changes the trend and there by AROON in the lower panel, is the positive trend change.
This is all positive and to boot, HUI is not really over bought. But a one day poke above a resistance level is not the same as clearing resistance. It will be important to see what HUI does at and above 180. Additional resistance between 190 and 200 is noted.
I am expecting some chop and grind to eventually come about in trying to take this level and turn it to support. Sooner or later peoples’ nerves will be tested. So understand if you are trader, a true believer, an accumulator on weakness, a risk manager… what ever you are, know it.
But generally speaking, if HUI can eventually end up holding above 180, it will have changed its intermediate trend to up. Macro-fundamentally, things are where they have been, some good and some not so good for the sector. We will of course update that area at least as closely as the technicals moving forward.