HUI so far is holding support
Approximately two weeks ago to this date, the gold and silver mining shares experienced a tremendous wave of short covering along with some new buying. Some of this was an unwind of the short positions established as a spread trade against the metals. After plowing through the 600 level and setting an all time high in the index, the spread trades were reapplied across some company stocks pushing the index back down even in the face of rising metals prices.
If you note on the chart, the index moved back down to the same precise level at which the fierce wave of short covering commenced. It held firmly and moved back up off the level. While it is down, it appears that this level near and just below 570 is solid support in the sector. If that is the case, the shares should hold near current levels.
Let's see what the rest of the session brings us and what tomorrow does as well in regards to these miners.
Hi Dan, with silver undergoing its parabolic move is it wise to buy at the current level since all past parabolic moves ended at the 8th day with a retreat in price. At present silver is approx 68% above its 200 day moving average. Maybe the history of past parabolic moves aren't applicable today since Asia/India are buying keeping the prices sustainable?
ReplyDeleteA lovely piece of analysis on the HUI
ReplyDeletehttp://thetsitrader.blogspot.com/2011/04/is-it-too-late-for-miners.html
Have a read and enjoy.