It tells us it’s bullish out there!
Putting away the pompoms we see that Huey is hitting a zone of potential resistance on the weekly chart below (click to enlarge the view). It’s time for traders to know they are traders and investors need to know they are investors. HUI – a relatively lumbering entity compared to many stocks in the sector – has put on about 50% in a matter of 3 months.
The news is all positive for the sector. Central banks are falling all over themselves in a race to the bottom in interest rates and currencies, economies are flagging and risk is rushing off (and into bonds, gold and yen). The macro is playing right into the hands of our best fundamentals per this cartoon…
It’s almost too perfect, which is why I wanted to draw a map of HUI to give us a few parameters to work with. It has resistance at around the current level short-term, but longer-term would target 280. Later, if all goes well our primary longer-term target in the mid-high 300s would be loaded.
Personally, I don’t think the current resistance area looks very compelling as to be a show stopper. But I wanted to note it as a potential pause point, as well as note that there looks to be little more than hot air between 220 and 280, in the event HUI is able to punch through here.
Just some observations for you to use in your own decision making if you’d like.