The gold stock sector is bouncing after holding a key level at the uptrending daily SMA 200 (orange) and the former downtrend channel’s top. A subscriber mentions the potential of a ‘C’ leg down, and that is a technical possibility. If that were to come about we’d look as low as 32, as a ‘C’ or final washout leg is usually a strong one.
But this chart shows the mid-38s as a short-term resistance area that, if overcome, would set up a test of the underside of the SMA 50 (blue). The SMA 50 at around 40 (+/-) is the proving ground. Any rise above there opens up the probability of new rally highs and our target of HUI 375+ per bigger picture charts.
Personally, I am holding (aside from company-specific considerations) and will hedge if needed. Watch current resistance and the 39 area and then the SMA 50 around 40.
