HUI continues to make good improvement by its daily chart, which means that the already constructive weekly chart is gaining the upper hand.
HUI continues to make good progress but until the red neckline is crossed it remains in the same positive, but unconfirmed stance with regard to a new rally leg. The red dotted neckline is part of a downtrend channel just as the green dotted neckline is part of an uptrend channel.
Gold got blown up in 2 days with respect to the short-term rally. Watch for gold to bottom before silver as we likely transition into a phase of gold leadership over silver. Key support is from the 1300 down to 1270.
A brief update to note HUI is now approaching the resistance level of 245 to 250 that we have been noting.
The gold stock sector is pulling back today after HUI made a new recovery high of 242.53, just below our anticipated strong resistance zone of 245 to 250. Hopefully, traders have been taking some profit. What comes next for gold stock players is a game plan…
HUI is coming to 205, as anticipated. That is the key support zone to a big picture bottoming stance.
HUI has clearly broken down from the bear flag. As noted previously, these breakdowns usually see a decline below the start point, which was around 216.
Updating the HUI symmetry plan, we see that this week’s candle is nearly perfect in its mirror image of the corresponding one from October. So all the miners need to do is finish out the week around current levels and our ‘picture analysis’ lives another week.
Well, our work of art kept to plan for another day. The two shaded candles are the corresponding candles of interest for this week.
Yesterday HUI did exactly what we asked it to do in order to remain normal to the current plan. It dropped into the 224’s, filled the gap and has not made a lower low to the last green arrow. So it remains in a baby uptrend. I would not get too concerned about reading a rising wedge into a 30 minute chart, but it is inserted regardless to again play Devil’s Advocate.
In reviewing the second of the two HUI weekly charts of the previous update, I want to blow the view up and illustrate the symmetry between the current ‘down from neckline’ vs. the previous ‘up to neckline’.
HUI Daily Technicals
HUI got above the 50 day averages and changed the daily trend by gapping up January. It then made a consolidation handle, which found support at the EMA 50 in early February. It then became gappy as aggressive buyers chased it up to its over bought state (as of yesterday).
Today there is some turbulence. Good, an extended rally scenario would not want to see the sector fly up to excessively over bought levels all in one big gulp. HUI…