The short term rally in Newcrest is over
The short term rally in Newcrest is over. Since mid February as the share price was heading higher, momentum was dropping on the RSI. This divergence has now pushed NCM out of its recent uptrend. The breaking of this uptrend was done on high volume, as investors became nervous about the US Fed's next move. With tapering still underway and interest rates in the US looking to tick up sooner than expected, the gold price will be under pressure. NCM has support around $9.80, but considering how impulsive the move down is, I expect that support to not hold for long. NCM is still in a longer term downtrend. The arrows on the chart show you that it has once again formed another lower high. So it could potentially head under $7. If it finds a low above $7, then NCM starts to look interesting again on the long side.
Michael Gable is managing director of Fairmont Equities. We are a small boutique advisory that uniquely combines both fundamental and technical analysis. As a result, our analysis is featured regularly in the finance media such as the Australian...
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