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by Kevin Hopson
Though Newmont Mining faces further obstacles in the short-term, bearishness in the stock is starting to subside.
Position: Accumulate
Kevin Hopson
Kevin has been a technical analyst for roughly 10 years now. Previously, Kevin owned his own business and acted as a registered investment advisor, specializing in energy. He was also a freelance oil analyst for Orient Trading Co., a commodity futures trading firm in Japan. Kevin is currently a freelance writer.
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GAPS
Newmont Mining's Bullish Gap
03/18/04 12:47:23 PMby Kevin Hopson
Though Newmont Mining faces further obstacles in the short-term, bearishness in the stock is starting to subside.
Position: Accumulate
| The last time I touched on Newmont Mining (NEM), I was calling for a potential short-term bottom, as bullish divergences on the chart indicated a forthcoming reversal. Though a bottom was eventually confirmed, a reversal of the short-term downtrend was not. However, Newmont is starting to show signs of strength that could eventually lead to a resumption of the longer-term uptrend. |
| Looking at the chart below, you will notice that Newmont has now gapped above February's downtrend line (red line), as well as its 50-day moving average. Both of these had been acting as stiff resistance for the stock in recent weeks. As a result, the gap higher was extremely bullish. Now that this has occurred, the next upside target appears to be the $46.50 level. This is the site of the black median line and the 61.8 percent retracement level ($46.55) from the December '03 to February '04 decline. |
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| Graphic provided by: Stockcharts.com. |
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| If Newmont can overcome resistance here, the long-term uptrend will likely resume and the stock should look to test its 52-week high just above the $50.00 level. In the meantime, I would look to accumulate shares of Newmont Mining in anticipation of higher prices down the road. Since multi-pivot gaps (gaps above a trendline of three or more connecting points) tend to act as support once they are broken, I would look for initial support around the $43.50 level. |
Kevin has been a technical analyst for roughly 10 years now. Previously, Kevin owned his own business and acted as a registered investment advisor, specializing in energy. He was also a freelance oil analyst for Orient Trading Co., a commodity futures trading firm in Japan. Kevin is currently a freelance writer.
| Glen Allen, VA | |
| E-mail address: | hopson_1@yahoo.com |
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