Gold shares
The gold mining sector has been among the best performers this year not least because it underperformed by such a wide margin last year and because the gold price has broken its medium-term downtrend.
The NYSE Arca Gold BUGS Index jumped from 100 to 286 between mid-January and mid-August before entering a corrective phase which has at least partially unwound what was a wide overbought condition relative to the trend mean.
Today’s upside key day reversal from the region of the 200-day MA suggests demand is starting to be reasserted and upside follow through tomorrow or next week would confirm a low of at least near-term significance.
Clicking through the constituents of the Index the shares that bear the closest resemblance to the above chart are those of South African gold mines. For example Sibanye Gold has also closed its overextension relative to the trend mean.
A number of gold shares have so far experienced shallow reactions not least Newmont Mining. It also posted an upside key day reversal today to check the short-term slide.