NEM WEB

[G-khan]

NEM WEB

Charts are log, traced from bigcharts

One possible future for Newmont, courtesy Captain Hook

Another somewhat divergent view

Newmont Mining - major HUI component, bell-weather PM share and largest market cap in the sector (at least until the merger of Anglo Gold and Ashanti is concluded) has had a great run for a big guy. It's now sitting on a new multi-year high. The question is, can it go any higher?

No, actually, the question is not can it go any higher - it has been - twice where it is today in fact. The question is - will it continue upwards, sideways or down going into Christmas? Up and the HUI goes up with it. Sideways and the HUI may still go up. But down - now that would put HUI 275 in doubt before Christmas. Back in March I argued that the HUI was headed for 275 autumn 2003. That was from a base of around 115. It is now pushing 220. Close but no cigar. We are 2/3 of the way thru the move to my primary target. Or, to put it another way, we still have 1/3 to go in pretty short order according to wave analysis. The purpose of this analysis is to try to second guess NEM's next move.

WEB

The most obvious starting point had to be the top lines. The ascending resistance from 74-88 is well defined, topping at the blow-off peak at $80. The descending resistance only has two points supporting it - well actually three now, because we are right on that line today. Parallel lines connecting price direction changes were scored thru the chart to reveal the web as shown above. The web is supported by a fan from the blow-off spike.

In the next chart the web has been replaced with a diamond taken from the web. Overlaid on this I have drawn three more parallel line sets.

DIAMOND

Going gently uphill are a myriad of dotted pink trendlines. These lines are parallel to a diagonal of the diamond. I believe this is the prevailing trend for NEM.

Two steeper trends are shown, one falling, the other rising. Note the thicker blue lines. Last time this line appeared it projected the final blow-off. I wonder if the same will be true this time around? Perhaps we are seeing the formation of another, steeper diamond with 2 blue sides? If so, the price objective (PO) for 2011 would be around $120 - $160.

= 200-300% gain from here in 8 years

Meantime strong support, in the event of any pullback, is given by the rising blue uptrend line, currently sitting around 30.

ARROW

From the above chart it is clear that between now and sometime in early 2005 the breakout of an upward sloping but essentially symmetrical triangle must occur. We have seen this formation on a number of charts. It looks and feels like there will be a lot of potential energy compressed into that arrowhead - and the further forward we go without a resolution the higher will the price pressure be.

COMPLEX

This chart shows a number of features.

PITCHFORKS

The white lines are equally spaced, as in a pitchfork. The top channel is clearly defined, the bottom just forming.

The black lines are actually headed in the same directing as the pink ones in chart 2. They are equally spaced about a mean swing line, giving another pitchfork. Here I have indicated the swing line by shading the area under the price chart. The swing line is an extension of the left/right diagonal of the diamond.

H & S

The yellow dotted line marks out a pointed head and shoulders formation, while the pale blue dotted line may eventually reveal an inverse fat-head and shoulders-like formation.

SINUSOIDAL

A sinusoidal meanders throughout, turning at and tangentially to dotted black or white support/resistance. It is conceivable that the sinusoidal be turned back at the swing line. However I think the sinusoidal is now looking for the upper black dotted line. It may even hit at a point coincident with the intersection of black & white.

I do not own NEM.

[xzorro]

Hi ! You made a nice analysis for NEM. BTW I just posted also on NEM in another thread (started by Scorpio).
i.e.: Scorpio - Gold and Silver charts 11.3

I just looked at the ST chart noting that over the last days we have Shooting Star candlesticks as a sign of resistance. So, I don't expect an upwards breakout on short term. Hence, I was wondering if at this stage it is worthwhile to sell Calls (when having NEM stocks).

However, I did not do yet any LT analysis as you did.
First let me note that the computed Price Objective (using PnF) is: 76. What is the reliability of this: I don't know.

Also I can see a strong (horizontal resistance (from the former High early 1997) ~60, so 60 as target seems well possible.

Question: which gold/ silver/ copper miners do you own and what do you recommend?
I am Long: NEM, KGC, GG, SWC, NXG.

Regards