Before the "gold bugs" make it to the front page, we want to present a low-priced gold name with an attractive chart: New Gold (NGD).
First let's look at the price action in this chart of NGD, above. Every dip to or just below $2 has been bought. The On-Balance-Volume (OBV) line turned up in August and shows that buyers are more aggressive and have been buying more shares of NGD on days when NGD closed higher. Prices have climbed above the 50-day moving average, and now the slope of the 50-day average has turned positive.
Prices are also above the 200-day average. The Moving Average Convergence Divergence (MACD) oscillator generated a crossover buy signal and is above the zero line. I am looking for the advance to continue with a retest of the overhead resistance around $3 and a swing objective of $4.
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It's hard to call a stock that doubled over the past six months oversold, but that is indeed what we see.
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