Yesterday’s NFTRH+ update noted current resistance and a higher resistance level for HUI, each corresponding with Fib retrace levels. Predictably, Huey is having a bit of an issue at resistance #1, the 50% retrace area. Let’s now look at what needs to remain intact in order to keep open the higher resistance target at 831.
First off, I like this chart because Fib levels coincide with visible chart resistance and the key short-term support level (shaded green box) coincides with the 200 day moving average.
So HUI is recoiling a bit from clear resistance and needs to hold within this support box to keep the rally comfortably intact. Again, yesterday we noted that on the short-term “HUI is not going to continue going straight up day after day as it already has.”
So it is likely that Huey is taking a much needed breather within an intact rally. That is, as long as support holds in the 720-740 range. If it does, we’re still looking at 831 and the 62% Fib.
A drop to support at 670 could also come within the context of the current rally. But it would obviously be less comfortable in the short-term. But it could be more bullish later and even mitigate the potential of a hard September correction.
Bottom Line
I feel myself getting a little talky, so let’s simply note that the rally is still on as HUI pulls back a bit, in the process of testing the SMA 200. If that test succeeds we’re looking at 831 or so, near-term. If the test fails, we’re targeting the 670 area, but potentially improving the outlook for September by getting a legit pullback over with sooner.
There are of course other options in play. But this is how I read the situation, currently. Macro-wise, I also read the fundamentals as having bottomed and looking up in the coming months.
