Gold Stocks May Be Getting Ready To Rally
As you know I am bullish on silver and gold (mostly silver) but now I am also becoming bullish on gold/silver stocks as well.
Above is a dialy chart of HUI (gold bugs index). What I've noticed is that this index tends to make bottoms every 3 or 4 months. It appears to me that the last cyclical low was made last month which means gold stocks should begin to rally soon if I am correct with my analysis.
In the lower pane is the stochastic oscillator which has been very helpful in identifying the cyclical lows. Every time this oscillator moved below 20 and then turned back up above 20, the HUI index bottomed and a rally followed.
If I am correct, the HUI index should rally to at least 370 which would be a new year high.
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3 comments:
Kevin, but it's an index. How do you trade it?
you trade the components of the index...The following stocks are in the HUI index:
ABX, AEM, AUY, CDE, EGO, GFI, GSS, GOLD, GG, HL, HMY, IAG, KGC, MDG, NEM.
Kevin, How about some hui call options?
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