HUI is oversold, sentiment has been pushed down and here we have a little daily chart hammer candle (potential reversal candle if it holds up). This index can bounce at any time, and if it were to bounce and if said bounce is fairly strong the upside may be limited to the down-turned SMA 200. So if a bounce comes about it would be counter to a resumed downtrend.
For reference, here is the public optimism index for GDX. It shows a favorable sentiment backdrop on a contrarian basis.
While we are at it, let’s also review gold and silver sentiment.
Gold hedgers have been covering net shorts but not nearly to a degree that would get us feeling very bullish.
Public optimism for gold is also not where it needs to be to pound a contrary table.
Silver hedgers are in a similar middle ground.
And public optimism in silver, so brisk during the #silversqueeze promo, is tamped down but not yet to an extreme.