Gold Mining Index Shows Bullish Signs

By Bryan from Pitchfork Playground

We looked at these charts just a few weeks ago in my Goldbugitis letter on April 19. The charts still look pretty so I’m doing a quick update.

Here’s the monthly HUI chart. Price continues to base above the 152 support level. MACD is rising steadily on a buy signal. A Fibonacci retracement of just 38.2% gives us a target at 335 which would also take price to the upper median line of the Andrews pitchfork.

HUI_Monthly_1996_May_2015

This big-picture chart illustrates the significance of the 270 period regression line. Notice that price has been under this level since 2012 and that the level acted as resistance twice in 2012 and then again in early-2015. In my opinion the recent break above the 270 RL signals a major transition in the mining stock sector.

The transition, of course, is from downtrend to uptrend after three+ years of steadily lower prices. The blue Andrews pitchfork is describing what could be a nascent uptrend in this sector.

HUI_Weekly_2009_May_2015

Here’s a closeup of the recent action. Note the bullish divergence between MACD and price along with the bottoming action in the grey support zone. The median line of the blue Andrews fork gives us a target around 212.

HUI_Daily_2014_May_2015

Charts like these are eye-candy for a serious Gold bug like me. I hope you enjoy them as well.

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