 ChartWorks
XAU and HUI at an Important
Crossroad
Technical observations of RossClark@shaw.ca
Bob Hoye
Institutional Advisors
November 5, 2004
It is now 23 days since the HUI generated upside exhaustion.
This was the first overbought reading since the bullish crossover
of the 20 and 50 day moving averages. An A-B-C style of consolidation
was anticipated.
Prices have now consolidated
similarly in pattern and time to what was seen in 2001, 2002
and 2003 (17, 19 & 23 days).
- The RSI is below 50 as we'd
been hoping to achieve as the consolidation nears its conclusion.
.
- The 20-day standard deviation
band is close to being tested.
.
- Prices have declined to the
40-day moving average.
.
- Finally, my proprietary summation
index has generated a short term oversold reading in the same
fashion as we observed in the previous three examples.
The first day with a higher
high should suggest the bottom is in place. Once it is followed
by a MACD signal we'll have an even better confirmation. For
traders, risk can be controlled at the lows of this consolidation.
Bob Hoye
Institutional Advisors
E-mail bobhoye@institutionaladvisors.com
Website: www.institutionaladvisors.com
CHARTWORKS - NOVEMBER 3, 2004
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