Wednesday, August 31, 2011

HUI Gold Bugs Index potential breakout

With Gold trading near $1835 and ounce and Silver at $41.75, the Gold and Silver miners are starting to get some attention.  Speculators on Wall Street may be taking positions in the Senior, Mid tier and Junior miners looking to acquire a nice profit in the 4th quarter of 2011.

Here is the Amex HUI Gold Bugs Index going back to September 2009.  It broke out above the trading highs that were produced in late 2009 and early 2010 in September 2010.  Since then, the HUI has been in a another trading range between the fibonacci 100% level and the 161.8 level.

There is a triple bottom which is almost a mirror image of the triple top that was produced a year earlier. A perfect example of a previous high that is now support. The HUI also touched the top fibonacci range (161.8) 4 times which has been providing heavy resistance.

With PM prices on the rise, quarterly earnings for all quality miners should meet or surpass expectations. Look for the HUI Index to break above the 609 high that was produced in early April this year.  With September around the corner, I'm expecting a breakout with the quality Gold and Silver miners. It has been quite a waiting game and as the saying goes, 'all good things to those who wait'.

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