We reviewed the charts and indicators for Newmont Mining Corp. (NEM) earlier this month, when we said, "NEM has a pretty good looking base pattern. A close above $38 will be a breakout and traders who play the long side should risk a close below $34 and investors should risk a close below $32." Yesterday NEM closed above $38 and the rally has continued this morning.
Yesterday NEM closed above $38 and the volume increased to its best level of the month. While there may be a quick and short-lived pullback, it looks like bullish case for NEM is front and center. Let's see what has changed since early August.
In this updated daily bar chart of NEM, above, we can see that the 50-day moving average line crossed above the slower-to-react 200-day moving average line earlier this month. Technical analysts call this crossover a "golden cross" and it can foreshadow further gains for the security under consideration. The 200-day moving average line is still flat but its slope could turn positive soon if the recent gains continue.
The daily On-Balance-Volume (OBV) line shows a steady rise from December signaling aggressive buying by investors as the line rises even as the declined or traded sideways. The two moving averages of the daily Moving Average Convergence Divergence (MACD) oscillator (lower panel) crossed to the upside from above the zero line for a fresh outright go long signal.
In this weekly bar chart of NEM, above, we can see that prices are above the now rising 40-week moving average line. The weekly OBV line turned up at the beginning of July and the weekly MACD oscillator is now above the zero line.
In this Point and Figure chart of NEM, above, we can see the breakout at $38 (look for the "8" on the chart) and the new price target of $53 for this well-known miner.
Bottom line: We don't know what will happen day to day on the international stage but investors were buying NEM well before the current tensions. If you bought the breakout stay long and risk a close below $35. Our potential price targets are $46 and then $53.