In Thursday morning’s update we projected the initial support levels for HUI at 290 and 282, the second of which is better support because it has a much thicker visual support area (shaded green) and it includes the EMA 20 and the 38% Fib retrace level. Personally, I think Huey is probably going there.
The question will be – and this is the gold stock sector after all, home of the more intense corrections than you think they’ll be – will it test the SMA 50 and the 50% Fib area at 273? Very possible. Keep it in mind. Channel bottom? Could happen, but by the time that could be tested it will probably have risen to the SMA 50 area (273).
Personally and ironically, if HUI makes a deeper pullback to the SMA 50 I’d give it better odds of turning the bounce to a real bull market rally than I would if it just tapped 290 and went back up. 280 is also viable as a cleaner that could set up a better rally. But as long as HUI holds a higher low to late March, it’s still rally on. Let’s keep 273 in mind.