Chart of the Day: Gold Miners

This post comes from my friend Tiho at Short Side of Long:
Today’s chart of the day focuses on Precious Metals sector, just like the previous post about Silver. The chart below shows that Gold Miners ETF is currently extremely oversold as Bullish Percent Index comes close to single digit readings not seen since late 2008 bottom.

Other breadth measure which shows extremely oversold levels is the Percentage of Stocks Above Moving Average indicator. Here is what Gold Miners sector breadth currently reads:
  • Gold Miners Breadth % Above 10MA @ 0%
  • Gold Miners Breadth % Above 50MA @ 0%
  • Gold Miners Breadth % Above 200MA @ 15%
Percentage of stocks above 200 day moving average actually got as low as 7% last night in US trade. On top of that, it looks as if Gold Miners are gearing up to start outperforming Gold on relative basis, which would signal a potentially strong rally ahead. It is worth pointing out that Miners have outperformed since December 2010, which has been over a year now!