Gold Bugs Have a Quantitative Reason to Buy Newmont Mining

 | Jan 25, 2018 | 1:20 PM EST
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Newmont Mining Corp. (NEM) has rallied with the price of gold going up in recent weeks. Market observers may be pointing to the decline in bitcoin or the plunge in the U.S. Dollar or something else, but now investors in NEM can include the quantitative upgrade to 'Buy" by TheStreet's quantitative service.

In this daily bar chart of NEM, below, we can see that one rally got underway back in early July. Prices advanced to early September and then corrected down into December. Since the middle of December NEM has rallied strongly to new 52-week highs. NEM is now above the rising 50-day moving average line and the rising 200-day average. The daily On-Balance-Volume (OBV) line has been strengthening since November and is close to a new high. The Moving Average Convergence Divergence (MACD) oscillator is pointed up in a bullish mode.

This weekly chart of NEM, below, is interesting in that its so strong for so long. NEM made a small base in late 2015 and then nearly tripled in 2016. Prices made a high-level consolidation from 2016 to the end of 2017. Prices are now above the rising 40-week moving average line. The weekly OBV line has been strengthening since June and the MACD is bullish.

In this weekly Point and Figure chart of NEM, below, we can see the current advance. A breakout at $37.80 is important and a price target of $56.25 is shown.

Bottom line: I am not a gold bug but I am a gold bull right now. Traders looking to go long or add to longs on NEM could try to buy a dip towards $40 and if it does not materialize they should buy a close above $42. The mid-$50's is my intermediate-term price target.

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