Last week we wrote that the precious metals complex had not broken
out yet and had more work to do before it could attempt a true breakout.
The metals had some more upside and so did the shares. However, the
poor performance of the shares this past week could warn of a larger
reversal.
We thought the gold miners could rally up to resistance at the
400-day moving average. Instead of pushing a bit higher, their rally
reversed course at the 200-day moving average. Note the action since
last summer. The miners had a strong rally up to the 400-dma and later
recovered to both moving averages when they were quite close in January.
This recent rally did not reach the 400-dma and that signals weakness.
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