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Gold Bugs; Bullish Reversal Pattern At Support?

|Includes: VanEck Vectors Gold Miners ETF (GDX)

Gold & Silver Mining stocks have had a rough few weeks, falling in excess of 15%, after a sharp post Christmas rally. Are they in trouble or about to bounce of newly created rising channel support?

Below looks at the Gold Bugs Index (HUI) over the past few years.

click on chart image to enlarge

gold bugs chart

Gold Bugs index has created a series of lower highs since the highs back in 2011. Over the past year, the index is attempting to create a new series of higher lows and higher highs.

The recent decline in the index, took it down to 1-year rising channel (green shaded channel), where it might have created a "Weekly Reversal Pattern" (bullish wick) at (1) last week. This reversal pattern/bullish wick may be taking place at 1-year rising support. Each time the index has touched the bottom of this rising channel, it has created a bullish reversal wick. This potentially is the 3rd bullish reversal pattern/bullish wick, taking place at the bottom of the rising channel at (1).

Full Disclosure; Premium and Metals members tookn a position in this sector last week, with a tight stop below (1).

Gold Bugs bulls do NOT want to see 1-year rising channel support give way!!!

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Disclosure: I am/we are long GDX.