Ref. the update on May 18

HUI went on to ping 325 and it would have been surprising had it not paused there. The daily chart has gotten moderately overbought and a reaction back to the SMA 200 would also be normal. That is not necessary to relieve the O/B. That could come through a few days of grinding (consolidation) as well. We’d want to see RSI meet its EMA 20 and hold it.

Well, we actually got both things. Huey worked off the overbought to a degree by consolidating, but is still pulling back toward the SMA 200. Ah, the gold stocks. Never a dull moment.

Here is the chart from that update showing the index having hit anticipated resistance, consolidating and today dropping. It looks as though the pullback can go to the rising SMA 50 (currently 293) where there is also what should be firm lateral support.

Speaking strictly as a technician, this would be a buying opportunity if indeed HUI is changing its trend. The stress on the broad markets is helpful in that regard because the inflationary party from August to February sure did no favors for gold and the miners.

When thinking about the daily chart, also remember the very constructive big picture monthly charts for HUI and gold. Each has broken a handle to the upside and this could be the first test of that situation.