To Get Bullish on Gold Stocks For Real?

With the disclaimer that several quality gold stocks are already bullish – which I’ve seen as a positive divergence for the sector – we take the sector as a whole and note a lot of resistance traffic overhead for HUI. Here are some technical parameters laid out in a subscriber update last week. We’ve expected a bounce, it is here and the milestones below are what stand in the way of a real bull phase.

Here is the daily chart of HUI that goes with the numbers above. Of course, there is more than just the technical situation in play. For instance, a crack in the stock market could go a long way toward boosting this counter-cyclical sector. Also, the gold/oil ratio for 2017 has been positive, and Q2 is about to begin reporting. But HUI has not even climbed to its 1st real resistance point, which is the SMA 50.

hui

Sentiment-wise, I have a couple of indications. First, this graphic (from Sentimentrader) was contrarian bullish just a week ago. Now, after last week’s bounce the contrary angle is fading.

sentiment

The second sentiment item comes from the free email list, which provided some cautionary talk on the precious metals, pending at least some of the above resistance parameters. I quickly and summarily received an unusual number of unsubscribes. Wouldn’t want to negatively reinforce a gold bug getting ready to make a killing, now would we?

Disclaimer 1: I am no longer short the sector and even hold a few longs. Disclaimer 2: I will re-short if that is what is indicated off the bounce going forward or I will get longer if that is indicated. But one thing I will not do is get emotional. The road map above does not care about emotions.

[edit] Also of note, while some are declaring the now-bullish look of the gold (silver is similar) CoT (from snalaska.com)…

…a longer-term view allows for it to get even more bullish (from freecotdata.com)…

Subscribe to NFTRH Premium for your 40-55 page weekly report, interim updates and NFTRH+ chart and trade ideas or the free eLetter for an introduction to our work. Or simply keep up to date with plenty of public content at NFTRH.com and Biiwii.com. Also, you can follow via Twitter @BiiwiiNFTRH, StockTwits, RSS or sign up to receive posts directly by email (right sidebar).