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Chart for the Day

Commentaries & Views

Featured is a chart that compares the stocks from the S&P 500 Index, to the Mining Stocks of the HUI Index. 

The chart pattern is an Advancing Right Angled Triangle (ARAT).  This formation usually breaks out at the top (blue arrow).  The moving averages (blue and red lines) are in positive alignment and rising.  This lends support to the expectation that the breakout will occur.  If and when the breakout occurs, it will mean that generic stocks will continue to outperform mining stocks, just as they have been doing since September.  However, the supporting indicators (RSI, CCI and ROC) are neutral at the moment, and if they turn negative it will mean that the brown resistance line, in effect since January, is holding.  In the event that this leads to a breakdown at the green arrow, it will mean that mining stocks are outperforming generic stocks.

This chart is ‘one more tool in the toolbox’ and should be looked at once a week for guidance.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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