NFTRH+; neckline taken out; here’s what Huey needs to do next

The bounce is on from the low of 180. We have potentials in play for HUI to have bottomed at 180 (measured target off of the little H&S pattern was 178) or to have new lows out ahead.

It sounds a little like running with the sentiment herds, but I lean toward (but have not set in stone) new lows to come amid a generally solid risk/reward scenario developing.

But let’s let the daily chart tell us what it has to say today.

  • Neckline broken to the upside (minor positive)
  • Resistance here at the EMA 20
  • More resistance at the SMA 50 (204.36 and sloping down)
  • Minimum objective to improve the technical view is to take out the Right Shoulder (208.35)
  • Taking out the Head (215.93) and holding above it would target clear resistance at 240+ and potentially the SMA 200 (currently 253.69 and gently sloping down)
  • RSI and MACD are negative, but RSI is on the verge of going green and MACD is up triggered. Not standing in the way of further bouncing.
  • HUI’s relative strength to SPX is moderate on the short-term as broad stocks bounce as well. That’s not usually the prescription for solid run as a ‘unique’ sector for counter-cyclical gold stocks. The HUI/SPX ratio is holding it’s recent lows with RSI and MACD positively diverging, as per the previous update. That’s something, at least.

Bottom Line

Respecting the trends, it’s a bounce only and unfortunately, that would be the case even with a test of the resistance beginning at 240. That’s a lot of upside room. I’d prefer that if it’s going to fail it do so sooner rather than later. But whether it fails promptly or after a larger bounce, or goes bullish for real, I am going to let the macro fundamentals guide me.

It is much easier to buy a technically bearish market if the fundamentals are rock solid and as yet, they are not. They remain in development.