We haven’t paid Newmont Corp any attention this year because up until a month ago it was “dragging its feet” and making new lows. That now appears to be changing at last with it gradually reversing direction to begin a major new bullmarket, so it’s a good time for us to take a look at it, especially as it is the biggest gold mining company in the world so it would be very odd if the entire sector took off higher without it.
On its latest 6-month chart we can see that it tried to break out above an important resistance level late last month and failed because gold failed to hold a breakout above $2100. It also failed at its falling 200-day moving average, however, this is viewed as a temporary setback that will be followed by renewed advance. There are several important points to observe on this chart. The first is that when it ran at that resistance late last month, it did so with vigor and that resulted in a momentum breakout (MACD) signifying a possible change of trend. Secondly, it broke clear above its 50-day moving average which has since turned up and is now providing support following the reaction of recent days. Thirdly, the Accumulation line, which has been rising for weeks, has not dropped back on the reaction so far this month, which is bullish (the freak drop in this indicator early last month is believed to have been due to a huge “cross trade” and thus can be ignored). Taking all this into consideration it looks highly likely that Newmont will begin another upleg soon that will result in it not just breaking out above the important resistance level shown but also out of the downtrend in force from January and from a larger downtrend in force from the peak in April of last year and it may well be that the entire bearmarket from that time up till last month has been a giant 3-wave A-B-C correction to the bullmarket from the 2015 lows that preceded it.
Newmont Corp is therefore rated a strong conservative buy here for all timeframes.
Newmont Corp website
Newmont Corp., NEM, NGT.TSX, closed at $38.87, C$52.72 on 11th December 23.
Posted at 8.40 am EST on 12th December 23.