GOGO: Falling Wedge down to support… fills a gap, triggers MACD, meanders out of the Wedge and goes RSI 50+. Why else would I buy some not yet profitable company with a really obnoxious name?
No, charts don’t work. We are just geeks that all too many people either laugh at or more often express contempt for. We are the geeks who see patterns and keep memories of things we’ve seen before, while eggheads of all kinds over intellectualize everything.
As we did with SLW
last week earlier this week, today let’s take a look at a speculative leader to the precious metals rally and plot a near term upside measurement in the GDXJ Junior Miners ETF. By looking at pictures like these we are able to keep perspective and traders are able to plan targets, entries, exits, etc.
The chart is self-explanatory as a short term target objective.
Beyond that, I see continued bigger picture progress on our macro theme, which is for renewed economic stress (maybe to a small degree, maybe to a larger one) and a return of counter cyclical pressures, which should be a fundamental positive for the gold sector.
In other words, the precious metals stock rally could have much further to go in 2014, but it is getting a little over baked at the moment. The above illustrates a target at or below which a trader might consider taking some profits.
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 is only moderately over bought.
By breaking the consolidation handle in the first half of this week HUI has now established the 220 +/- area as the first key support level, replacing the former 210 +/-. That’s progress folks and if (there is surely no guarantee) this support is to be tested the ‘grinding bottom’ scenario would be well in place.
HUI is bullish and until such time as it takes out an important support level (ref: 210 and now 220), pullbacks are healthy. The above is provided as reference for profit takers, would-be buyers, hedgers and regular old holders.
A low priority update on Silver Wheaton’s daily technical status. This post is not meant to call anyone to any sort of action. It is just noting some data points for those interested. As the year unfolds, these type of updates will be produced on occasion as I spot identifiable objectives on charts.
SLW has a very clear chart pattern and a short term target of 26.50, which is a measurement projected from the December low and the blue neckline. SLW is starting to get over bought and the next resistance level is just above. This is a bullish picture overall.
One is a leadership breakout play in the form of quality royalty company Franco Nevada (FNV) noted for its imminent attempt at the trend line in an NFTRH Update early last week…
FNV weekly, from an NFTRH Update on Feb. 4 (password protected)
And the other is a bottoming formation in Agnico Eagle (AEM), which was noted in an Update on January 17.
GLD remains on a bull signal with MACD above 0 and the price above supportive 50 day moving averages.
The out performance of the gold miners vs. gold has been outstanding. It is what we look for in a bullish phase for the precious metals. But for balance we should note that this is not the first time HUI-Gold (or GDX-GLD shown here) has come to this point in both price and by RSI. Just an FYI for well-grounded players who want the fuller picture.