05/22/23
All that glitters this week IS gold…
With options volume jumping and pointing bullish, Harmony Gold Mining Company Ltd. (HMY) is worth a look:
Today’s chart is a look at the 4-hour time frame.
When looking for long plays, I prefer the 4-hour and weekly charts…
The former gives more raw data than the daily and the weekly helps determine higher time frame bias.
And given what we have here, I dig HMY for a long position…
This is a simple look at the chart here and the reason being is that this is a commodity-based play…
When trading these types of stocks, of course, you want to have solid fundamentals, but those don’t necessarily matter nearly as much when the underlying commodity is on a bull run.
Now, looking at the chart, I’ve marked off a Fibonacci Retracement from trough to peak.
And if you’ve followed along over the years, you know that I love a good retracement around the 61.8% level on equities.
Still, there are other aspects that should be taken into account…
In this case, HMY is on the march and the latest volume-based “BUY” signal on the chart shows a bullish movement with an over 500% increase in volume.
That tells me that a 61.8% retracement could be asking too much…
(I’d still leave some in the tank in case it does.)
But the 50% retracement level aligns well with the recent volume imbalance. This is an area of price that’s traded through quickly with little offering.
In terms of support and resistance, I’ve highlighted the breakout level from a previous high in white which should now be the new support given the bullish look on the moving averages.
If I’m buying and positioning for a longer term hold, I’d look for a move to the low $4.00’s with a max drawdown to ~$3.80 or so…
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