The price action in HUI is pointing to more imminent downside where my previous call for a possible RH&S formation is just being invalidated...
- The uptrend support line from 2000 (monthly chart) is firmly broken now & there is no way to draw another uptrend line for now...
- However, Fibonacci retracement is pointing to 270s as the next strong support area
- Bear in mind that, the bull may still be alive if it can be ultimately supported at 61.8% retracement level
- But, for now, stay clear of the miners and brace for more downside bias!
Similarly for gold, it is looking to trade a lot lower given the odds of miners pricing in and leading a lower gold prices in coming weeks...
- As such, it is warranted to redraw the major trend line for gold where Fibonacci 38.2% level is seen as the major support in coming weeks
- Given the steepness of gold price trendline since 2008, a better trend-line with a sustained gradient lies all the way back to 2000
- If we still use 2008's low as a connecting point, Fibonnacci 38.2% level offers a solid support around USD 1,300 level.
- I believe further selling should stop at this level if the bull is still alive!
- For now, long the physical on dip...
