NEM has plummeted to 52.00 today, hitting a Hidden Pivot support that I’d all but given up on. Since chat-roomers are reporting fills at 52.30, I’m establishing a 400-share tracking position for your further guidance. We won’t be out of the woods today until the bounce hits 53.21. Support here is dubious, but if the position is stopped out (at 52.12, as noted in the chat room) we’ll try again at 50.40, the next logical support below. _____ UPDATE (Thursday 2:22 a.m. EST): The stock fell hard, bottoming at 51.66. We got stopped out for $72, but we’ll try again at 50.40, as suggested above.
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The AB impulse leg shown is pure sausage, since it failed to exceed the 54.30 low recorded last July, but the pattern is so pretty otherwise that we can, and should, use it to attempt bottom-fishing in this stock. It’s been quite a while since we held a position in Newmont, but attempting to establish one at the ‘D’ correction target shown would appear to be a very low-risk gambit. Accordingly, I’ll recommend buying 400 shares with a 50.40 bid, good-till-canceled. I’ve also set a screen alert at 52.28, since that secondary retracement target could engender a tradable turn. _____ UPDATE: Odds of our stealing the stock diminished with yesterday’s breakaway gap, but well leave the bid in anyway, just in case. _______ UPDATE (Thursday, March 3, 12:03 p.m. EST): NEM is getting savaged today, pushing it closer to our 50.40 stink bid. Regarding the lesser HP support at 52.28, you can test the water there with a 400-share bid, but I’d suggest doing so only if you are using camouflage to limit risk to literal nickels and dimes. If you are unable to do this, try a 52.30 bid, stop 52.18. FYI, the shakedown has obliterated the 53.41 midpoint support associated with A=60.19, D=50.35. Because there are several patterns that project to within a a nickel of 50.40, odds favor a correction to that level. If so,, the pullback from October’s highs will have amounted to an unexceptional 15%. ________ UPDATE: We just missed, Newmont having launched sharply higher after pulling back to 52.69.
Newmont slightly exceeded a key support yesterday — a Hidden Pivot midpoint at 55.88 — but only by seven cents, so we’ll assume that it is still intact. If the stock should close below the pivot, however, or trade more than 10 cents below it intraday, that would indicate a likelihood of further slippage to as low as 51.54, our midpoint’s ‘D’ sibling.
Newmont’s health appears somewhat more precarious than that of gold futures, since the stock is working on a bearish impulse leg of daily-chart degree created on July 28 with a low of 54.30. We’ll use a midpoint support at 55.34 as a minimum correction target from here, but if the stock closes below it for two consecutive days it would be warning of more downside to as low as 52.68.
Newmont suffered damage equal to that of gold futures as a result of last Thursday’s downdraft, and the stock will now need to hold above 57.59, a midpoint support, if it is to avoid diving down its ‘d’ sibling at 55.42. Alternatively, a print at 60.75 over the next day or two is where the very lesser charts would begin to look bullish once again.
Newmont looks bound for a minimum 60.72 over the near term, but any higher would indicate 62.48. That’s a smidgen shy of the watershed high recorded at 62.72 early in 2006, but a breach of the pivot would imply that the peak is likely to be exceeded. Above it we could use a 71.14 target from the weekly chart to guide us.
Someone in the chat room remarked that Newmont was tracing out a “triple-top tower of doom,” so I thought I’d have a look myself. He’s right about one thing: the stock has been consolidating for long enough to raise doubts. The potentially good new is that Newmont wouldn’t need a huge rally to be back on top of the world. Specifically, a mere thrust to 50.86– seven percent above yesterday’s settlement price — would refresh the bullish impulse on the daily chart, exceeding a peak along the “wall” of 2008’s summer collapse.
