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Last time we profiled the Monthly HUI index, we pointed out the bullish pennant that was forming. Unfortunately, it has broken to the downside. No buy signal was generated as a result. For a buy signal to be generated the Pennant would have to brake to the upside. Even then a stop loss should be used for protection in case the upside breakout fail. The HUI index has gone down sharply and is testing the lows of 2004 and 2005. These lows may hold up but that remains to be seen.

Below is the HUI Monthly chart with the Monthly MACD and RSI. Both have turned down. Both are bearish. RSI has not reached oversold levels yet which is 30. If the MACD crosses below zero then this would be more bearish for the HUI. We have to wait and see what the charts will unfold.

Chris Narcouzi,
cnarcouzi@ne.rr.com

Chris has a BS in computer science. During College he instructed for two and a half years Calculus I trough Calculus IV, Differential Equations, Linear Algebra, Pascal Language, and Basic Plus Language. After graduation the college gave him an offer to teach these classes. Currently he is a Senior UNIX System Administrator and also a published Author on Technical Analysis.

Related tickers: (GLD), (IAU), (DGL), (GDX),

Outlook for Gold Bugs Index (.HUI)

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