On a daily chart of HUI we have 140 as key support. As with gold, I’d like to see the 38% Fib from the January low contain the pullback and that Fib just happens to be… at 140. So we have confluence in the 38% Fib, lateral support and the EMA 55 (which had chained Huey to a bear market all these years) all at or right around 140.
It would be a show of strength for HUI if it could avoid a deeper correction to 130. I don’t really mind 130 by a daily chart but I do mind it by this blown up version of the weekly (linear) we review each weekend in NFTRH. A decline below the EMA 55 and the October high is not desirable right now.
The reason I’ve made a big deal about the sector is because fundamentals combined with technicals to change the narrative. While I don’t expect the stock market bounce to last more than another few days to a week (we’ll continue to update that as needed), the gold sector will need a return to improving fundamentals (with gold turning back up vs. stock markets) and the above technical signal to hold or I would have to ramp back on the positive view.
That said, as it stands now it’s all normal and the view remains that an over bought sector is pulling back and still has room to drop another 10 points (+/-) while remaining normal. Below 140 brings on the prospect of abnormalcy and I just wanted you to have this look-ahead from the weekly view with its parameters.