Newmont Mining

Adjusted for theoretical gains recorded so far on an initial position of 400 shares, a hundred shares remain with a cost basis of 41.22.  I’d intended for this to be a long-term position, and so we will be selling call options against it from time to time.  Specifically, I expect the stock to reach 57.49 before the rally cycle begun in mid-March is due for a rest, so that is where we’ll look to do a near-the-money covered write.  My confidence in the target is high because of a recent stall a penny from the 55.07 midpoint of the bullish pattern shown.  If and when Newmont settles for two consecutive days above that number, or trades more than 50 cents above it intraday, a finishing stroke to the target will become an odds-on bet. _______ UPDATE (April 6, 3:24 a.m. EDT):  A strong upthrust has brought Newmont within putting range of the covered write we’d planned. Accordingly, I’ll recommend shorting one April 57.5 call if and when NEM gets within a dime of the target. You can use your discretion on this, playing it down to the wire, but please note that I expect  the stock to make a tradable top with 2-3 cents of the 57.49 pivot. _______ FURTHER UPDATE (April 6):  Newmont head-faked on the opening bar to 57.31, and I am not amused.  For now, maintain the short offer as suggested. _______ FURTHER UPDATE:  It appears that, for a rare change, we actually benefited from the opening-rotation sleaze factor, since the call option we were trying to short opened on the high of the day, 3.00.  This effectively reduces our costs basis on the stock to 38.22 while giving us $3 of downside protection.  Newmont would have to move above 60.50 before the covered write starts to limit our upside potential.  If that happens and we simply let the stock get called away, our theoretical gain on the trade would be more than $1,200.

We hold 400 shares with a costs basis of 50.40 and a 50.27 stop-loss. Today only, offer a round lot to close for 52.14, retaining the stop-loss for the 300 shares that would remain.  _______ UPDATE (11:08 a.m. EDT):  After exiting a round lot at 52.14 , we now hold 300 shares with a profit-adjusted cost basis of 49.82.  That implies a $900 paper profit at today’s so far high.  Since the purpose of these occasional “easy-as-pie” trades offered by Rick’s Picks is to allow even relative novices to recoup the cost of a year’s subscription, we are most surely ahead of the game.  For now, tie the position to a 50.75 stop-loss.  Once this pup gets above March 9’s 53.21 peak, we can let it ride.  _______ FURTHER UPDATE (10:39 a.m. EDT):  In the chat room just now, I have advised taking another partial profit, selling 100 more shares at a then-current price of around 54.64.  The theoretical gain of $482 will effectively reduce the cost basis of the 200 shares (or multiple thereof) we still hold to 47.41. ________ FURTHER UPDATE (March 30, 9:41 a.m. EDT):  In the chat room just now, with Newmont flailing wildy after a sleazy head-fake on the opening, I have recommended exiting another round lot at a current price of around 53.73.  Officially, I’ll record 53.60 as the sale price, though, since the stock is still acting crazy.  This leaves us with a hundred shares whose effective cost basis is 41.22

The 400 shares we hold from 50.40 survived the 50.18 stop-loss I’d advised yesterday, but I have little confidence in the so-far feeble rally that has ensued.  It kept the stock hovering just above yesterday’s lows, but that’s about all.  For now, maintain the stop-loss as advised and note as well that NEM would need to touch 51.13 to get out of immediate jeopardy.

We hold 400 shares purchased overnight Tuesday at 50.40. Since the stock could fall to as low as 48.10 if it breaks down here, set a stop-loss at 49.94.  You should plan on re-buying at 48.15, no stop, good-till-canceled.  I’ve included a chart that shows night-session price bars on the 5-minute chart.  ______ UPDATE (11:56 a.m EDT): Raise the stop-loss to 50.18.

We hold 400 shares bought yesterday for 50.40. For now, do nothing further.

We’re bidding at 50.40 for 400 shares, but NEM might not be so obliging. I’m not going to suggest chasing the stock, but it looks like it’s setting up for a push to 53.28 by way of the pattern shown.  The move will become an odds-on shot if and when the stock exceeds the 52.48 midpoint resistance associated with the target.  To get long, I’d suggest dropping down to the one-minute chart to find a camouflaged entry trigger.  The look-to-the-left peak at 52.48 could serve perfectly for that purpose (see inset). _______ UPDATE (8:02 a.m. EDT):  The overnight low so far has been 49.50, so I’ll assume 400 shares bought.  Please let me know in the chat room what prices you paid, since the stock traded down on an air pocket.  There are two more targets below — at 48.38, where I’ll suggest buying an additional 400 shares; and at 47.76, my maximum downside target. Both targets can be found on the 120-minute chart.

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.