NEM Newmont Mining Weekly Chart Oversold Positive Divergence

NEM is a key bellwether for the gold miners. The blue downward-sloping channels remain in play but as seen by the indicators, the stock is basing now.  The W pattern is very bullish and it immediately jumped to the 58-ish target but collapsed rather than consolidating and continuing higher.  Price is printing new lows, albeit by a hair, which sets up positive divergence (neon green lines). The red falling wedge is bullish.  Note, however, the short red lines over the last couple months for the indicators that are flat or lower. This indicates some continued sideways to sideways lower malaise but NEM is positioning itself for better things ahead.

The 42.20 level is key since Keystone's 80/20 rule says a failure of 42 will lead to 38. The 42.20 failure would lead to 41.80, so this level can be used as a latch ditch line in the sand to hold.  NEM would be agreeable to simply moving up from here on out, however, with all knife-catches, wide scale-ins are best, so the position can be considered for a long now, if price drops to the 42-ish level, an add can occur there, if 42 fails, the position would have to be placed on hold, until 38-39 for further adds. Keystone took a quick round trip long trade on the Friday bounce but is not in NEM right now. Projection would be sideways to sideways up for NEM moving forward. If price drops, pay attention to 42-ish. If the markets sell off strongly, NEM may be hit as well, but it definitely belongs on the long shopping list moving forward. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

Note Added 2/4/13 at 10 AM:  Note the gap at 43.20-ish (on hourly and minute charts). Price is over 44 now but may come down to fill this gap which may provide a nice entry.