NCM - Newcrest Mining

[M34N]

Another new 52-week low set for NCM. Just done some quick calculations;

NCM down 25% over the past 4 sessions ($27.40 - $21.24)
Gold down 3% over the past 4 sessions ($835 - $810~)

kennas; What do you think? Hovering near the $22 support now, next step down is $18 or another 10-15%, potentially could bounce back up to $24 or thereabouts in the next week before the next leg down? Or maybe a bottom in place now and up from here?

 

[aacantona]

Another new 52-week low set for NCM. Just done some quick calculations;

NCM down 25% over the past 4 sessions ($27.40 - $21.24)
Gold down 3% over the past 4 sessions ($835 - $810~)

kennas; What do you think? Hovering near the $22 support now, next step down is $18 or another 10-15%, potentially could bounce back up to $24 or thereabouts in the next week before the next leg down? Or maybe a bottom in place now and up from here?

Wow - i got out of this 2 weeks back at 26.5 - Based on fundamentals this stock is way overvalued and has probably come back to where it should. If you stroll through it financial statements, its sales have only changed marginally over the last few years and costs have increased. The gains in its share price seem only to reflect the spot gold price. There may be a bit of a bounce in the coming days but i would bet that it probably most represents a dead cat bounce!

 

[jet328]

Based on fundamentals this stock is way overvalued and has probably come back to where it should.

Agree, next major production increase is not until 2013 from memory.

Quite a few of the US gold stocks (of similar market size) trade on lower earnings multiples & better growth profiles

 

[Paladin]

Yeah - this one has been fascinating to watch. Took a short position at 25 ish, and am back in now long at 21.1

Barring anything unforseen happening with the POG (and it seems to have withstood yet another go at $790 resistance) I'm also expecting a modest upward retracement.

Still in a bearish trend since March, though. And the interesting thing about this correction is that the $21 support level has been tested and eroded, so on the back of bad POG news we may well see it hit sub $20 on a next downward leg.

One for swing trading, not buy and hold IMO.

 

[Sean K]

kennas; What do you think? Hovering near the $22 support now, next step down is $18 or another 10-15%, potentially could bounce back up to $24 or thereabouts in the next week before the next leg down? Or maybe a bottom in place now and up from here?

Impossible to tell for me. There's lots of little support levels bumping down, $18 looks the strongest on long term weekly if it makes it there. Obviously dependant on POG, and related to world economy, USD, inflation, geopolitics.

Wow - i got out of this 2 weeks back at 26.5 - Based on fundamentals this stock is way overvalued and has probably come back to where it should. If you stroll through it financial statements, its sales have only changed marginally over the last few years and costs have increased.

The increased sales are mitigated by selling the hedge book, effectively increasing revenue. NCM is actually one of the lowest cost producers of the majors. I posted some graphs in the thread a little while ago showing this.

NCM and LGL have been continually touted as takeover targets (for like 128 years, at least) and if they stay depressed, the odds would be stacking up. Cripes, we all might be able to chip in and buy them both soon...

 

[dizzle.henry]

i am not much of an expert on share trading but I am doing some casually, do u think that buying newcrest now would be a good option, ie now that the price has fallen so low, whats the probability climb back up to mid 30's - $40

 

[Paladin]

Kennas,

Hope you're feeling happy about the way NCM is trading at the moment! A few lovely days there.

 

[M34N]

NCM has been playing funny again, rising during a downward gold price a week ago, but today, going down with a rising gold price! I bought in a little more today right before the close, with a rising AUD gold price, this is only going to help the bottom line for NCM in the next couple months.

Couldn't understand today's movement though, as the rest of the market rallied on the rate cut, and the gold price went up further today, NCM actually sold off further into the day. Down 8% for the day when the gold price was up over 3% in NY and the AUD gold price up 8% over the past 24 hours.

Interesting times indeed.

 

[AnDy62]

Interesting indeed.

I got back in today. I think that gold will head north- mainly simply because of the inflationary plan to salvage the US and possibly, world economy. Gold is doing fantastic in $A terms, but people don't seem to notice that much.
I think the USD is defying gravity too, debt and inflation will see it come back IMO.

NCM is beautifully placed, it's well diversified, low cost, a big producer and has shown the ability to be a market darling when the ingredients are there, such as earlier this year at $40.

 

[Sean K]

This has been one of the most volatile stocks on the index recently, and that's saying something. Needs to get back above that resistance at $26.50 ish, which is also around the well established downtrend channel. Will probably only occur with some stability in the market and POG clearing $920-35 ish perhaps...

If POG stays solid in the coming months you'd expect some more consolidation around the sector with some of the better juniors with potential low opex resources that have been castrated being picked up by the likes of NCM, NEM, etc.

 

[M34N]

Hey kennas,

Notice that volume is decreasing on the down days, typically followed by high volume spikes to the upside. Figure we could be in for a nice upward swing soon, given the POG as well lately.

Interesting to see the HUI/XAU in the US trending downwards as well following the general market. Gold still trending up but too much fear to pump money back into stocks. Interest rate cuts will pump up gold, dump the US$ and hopefully pump up the goldies.

Hoping for a nice bounce up based on the POG and lower selling volumes, but wouldn't put the house on it, that's for sure.

 

[Uncle Festivus]

Classic dump & pump yesterday & today, looks like the insto's are buying again?

"Australian-based gold producers have got a big windfall gold price to benefit from,'' Hunter Hillcoat, an analyst at Austock Securities Ltd. in Sydney, said today by phone. ``It will benefit any local producer and any company that reports in Australian dollars.''

Newcrest, Australia's largest gold producer, will have net income of A$467.5 million in the year ending June 30, 2009, according to the average of eight estimates compiled by Bloomberg, compared with A$134.3 million last year. JPMorgan Chase & Co. increased its 2009 fiscal year profit estimate for Newcrest by 47 percent Aug. 29 after the broker cut its forecast for the local currency. Australia is the world's third-largest bullion producer.

 

[Sean K]

Poking it's head up through $26.50, but off early high. I want to see a good finish before putting my granny on it.

Gold didn't really move that much to justify todays move on LGL and NCM. Perhaps they are leading gold up, like they led it down? Perception must be that golds going to go for a run.

The only thing that's certain at the moment is volatility and sheeple running with the pack. Hard to be confident in anything really...

 

[prana]

I've accumulated some. Gold breaks out of resistance of 1110 to the Aussie Dollar. With interest rates dropping, and the massive massive massive liquidity injection, I'm bullish gold. It also reminds me of when I got into BHP at $13 and no one wanted any. Chart wise, it looks to be in the making of a reverse head and shoulder - A few more days should confirm the pattern formation or just a glitch in the bear column - I'm in anyways.

Better still, I want to know who Australia's biggest silver miner is ! I want in too.

 

[subi1]

Poking it's head up through $26.50, but off early high. I want to see a good finish before putting my granny on it.

Gold didn't really move that much to justify todays move on LGL and NCM. Perhaps they are leading gold up, like they led it down? Perception must be that golds going to go for a run.

The only thing that's certain at the moment is volatility and sheeple running with the pack. Hard to be confident in anything really...

Kennas

I thought gold actually went up near $100 aud last night. The price was around $1366aud.
It seems to be dropping back a little bit tonight but it is early.

Good luck

 

[Sean K]

Kennas

I thought gold actually went up near $100 aud last night. The price was around $1366aud.
It seems to be dropping back a little bit tonight but it is early.

Good luck

Ah, of course, I had my USD hat on.

NCM has just poked through $26.50, but not through the downtrend line. POG off quite a bit at the moment, so unlikely to hold above.

Agree on the possible H&S too....

Thrown some more S&R lines on the 1 yr chart which gives a slightly different picture with resistance. Looks like a general zone between $26 - $29 ish to be a problem. And downtrend around $30 ish. I couldn't have any confidence in a longer term trend starting to appear until those lines were crashed.

Still, with that waving cycle in there, there's definately short term opportunities to pick if you're game.

Waiting...waiting....

 

[chops_a_must]

Ah, of course, I had my USD hat on.

NCM has just poked through $26.50, but not through the downtrend line. POG off quite a bit at the moment, so unlikely to hold above.

Agree on the possible H&S too....

Thrown some more S&R lines on the 1 yr chart which gives a slightly different picture with resistance. Looks like a general zone between $26 - $29 ish to be a problem. And downtrend around $30 ish. I couldn't have any confidence in a longer term trend starting to appear until those lines were crashed.

Still, with that waving cycle in there, there's definately short term opportunities to pick if you're game.

Waiting...waiting....

Gold is now half way through a moon shoot here!

But this will likely be caught in the middle of any dumping. (NCM)

At least gold has definitively broken away from the market and is running its own course.

The CDS auction tonight is going to be a real litmus test for gold... If you aren't gonna hold gold through this, you never will or should.

 

[chops_a_must]

I'm beginning to think that a tanking POG would be good for NCM.

Anyway, it certainly looks like it wants to/ is trying to turn on the charts.

 

[M34N]

Strong reversal today, this one has been unfairly punished of late despite the rising gold price. I think it's pretty obvious now that with the higher prospect of a rising gold price later on, and finally some assurances of some stability in the markets, people want to park their money somewhere that should out-perform.

But even this movement today surprised me, saw it go positive in the morning after being down a couple percent and shrugged it off; especially since the XAU/HUI was down something close to 15% in the US session Friday!

I'm still holding this one FWIW. Strong believer in the POG and its potential to out-perform the rest of the market should hopefully be represented in the gold stocks.

 

[M34N]

Newcrest's First-Quarter Gold Output Rose to Record

Oct. 23 (Bloomberg) -- Newcrest Mining Ltd., Australia's biggest gold mining company, said output in the first-quarter rose 8.4 percent on record production at its Telfer and Cadia Hill mines in Australia and Gosowong operation in Indonesia.

A record 485,978 ounces of gold was produced in the three months ended Sept. 30, from 448,103 a year earlier, Melbourne- based Newcrest said today in a statement. UBS AG estimated output of 417,000 ounces in an Oct. 10 report.

Chief Executive Officer Ian Smith is boosting production as prices rose to an Australian-dollar record of A$1,414 an ounce on Oct. 10. A 30 percent slump in the Australian currency this half is increasing earnings for exporters who sell products in U.S. dollars and incur costs in the local currency.

Newcrest fell 8.5 percent to A$18.70 at 10:11 a.m. Sydney time on the Australian stock exchange. The stock has dropped 44 percent this year.

The company sold bullion at an average price of A$975 an ounce in the quarter, up from A$720 an ounce. Operating cash costs increased to A$365 an ounce, from A$186 an ounce.

Copper output dropped 2.6 percent to 21,550 metric tons in the quarter.

Making bucket loads of money and it's down about 11% right now on this news. Fundamentals go right out the window! Got to love the market at the moment