Our HUI Mining Stock Index Key trend-finder indicators remain on a Buy signal this weekend, however the HUI 30 day stochastic shown in the chart below is very close to triggering a new Sell, as the Fast has dropped almost 20 points below the Slow measure this past week. This tells us short-term upside momentum is weakening.
In the next chart, we show the HUI Purchasing Power Indicator and its correlation with Mining stock prices. This indicator is designed to identify the start of meaningful new trends. This weekend it remains on a Buy. Since this Buy signal on December 29th, 2016, the HUI Mining stock index has risen 32 points, or 17%. Good predictive correlation from this key indicator.
The next chart we show is a correlation between the HUI 10-day average Advance/Decline Line Indicator and Mining stock prices. This weekend this chart is showing a Bearish divergence, as the 10-day A/D indicator is declining while HUI prices are rising, suggesting Mining stocks are approaching a top. A corrective decline inside the larger degree rising trend is likely.
And finally, the next chart we present is a correlation between Mining Stock Demand Power / Supply Pressure measures with prices. Since the HUI Demand Power / Supply Pressure Indicator generated a Buy signal January 5th, 2017 Mining stocks have risen sharply.
However, this weekend we see two issues of concern for this rally. First is that the Demand Power Measure has crossed below the Supply Pressure Measure, not enough to trigger a Sell yet, but getting very close. It needs to drop 10 points below, and it has dropped 9 points below this weekend.
Also, there is a Bearish divergence between Demand Power and Mining stock prices, warning a top is either starting or approaching. It appears Miners are due for a correction within a larger degree rising trend.
Every weekend we show these charts and indicators for Mining stocks, which have also done a good job predicting trend turns for precious metals, to our subscribers at www.technicalindicatorindex.com
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