Thursday, June 22, 2006

HUI – Buy Signals

HUI – the AMEX Gold Bugs Index is a basket of relatively unhedged gold miners. Gold Indices like the HUI tend to lead the price of gold. Technically I observe three buy signals on the short term daily chart:

1) Diagonal downtrend line (previous resistance) is broken to the upside.
2) RSI downtrend line is broken.
3) PPO Histogram showing positive divergence.

So, unless the A-B-C correction develops into A to E correction (unlikely) it is reasonable to assume that the HUI is headed higher. The May top (401.69) will get tested and Higher high is certainly a possibility.

The technical situation of other gold indices (XAU, GOX & GDM) is similar. Investors and traders can get exposure to gold mining equity with the GDX ETF.

Browse Gold and Silver Mining Stocks blog Archive. See gold and silver charts and commentary. Visit commodities blog.

AMEX Gold Bugs Index(HUI)

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