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.
HUI Gold Bugs Index
Here is the updated daily view of HUI…
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.
On Monday the chart below was included in a post called HUI Gold Bugs Index Symmetry, before it had a chance to start making this week’s candle. Excerpted from the post:
“There can be a final drop this week but ultimately (going strictly by technicals, the fundamentals are another matter to be managed along side) if symmetry holds it would be a positive week for the miners.”
Well, I am not going to pretend I had a good week. It was an aggravating week at best. But at least Huey hung on and did indeed have a (barely) positive week after dropping early in the week (right off the bat on Monday, as it turned out) as speculated upon.
If symmetry holds, a new up leg would generate off of this right side shoulder. But even if that happens, according to a more detailed game plan in NFTRH, gold stocks would not necessarily be out of the woods just yet. So if we are lucky enough to go bullish, do me a favor, eh? Keep your balance and don’t listen to the cheer leading that will be sure to crop up.
Have a good weekend.