NCM - Newcrest Mining

[gav]

Good news doesnt always equate to a higher SP in these times, and it isnt just NCM affected. I could name others, but I'd be here all day and night.

"Operating cash costs increased to A$365 an ounce, from A$186 an ounce"

Earnings may be up, but thats a significant increase in costs too.

 

[Miner]

Newcrest's First-Quarter Gold Output Rose to Record



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

Some times reporting to market could be read differently.

It was true that NCM revenue gone up by 12% but the cash cost has gone up by 32% too. With price of gold being at a very low value, market volatility is so negatively placed the price fall in NCM is nothing ununsual IMO.

Market probably already factored the price with a much lower cash cost and higher POG. But please DYOR and I could be wrong.

Report is attached.

 

[johnnyg]

Interesting Chart. Been trending down since the start of the year, but ranging nicely in the channel. Could possibly be a short term trade looking for a bounce off the lower trend line. However after touching the top trend line previously it falls just short of the bottem trend line so could possibly bounce short term (middle of Nov) to the $22-23 range before heading back down to ~$14 (start of Dec)

 

[amory]

compare this chart with the price of gold - POG - & you find that the same peaks are very pronounced: mid march, mid july & then sep/october. in the same descending pattern.

wouldn't that indicate that one had better wait for gold to make up its mind, before projecting the next peak & trough for NCM?

 

[DowJones]

This stock is driven by the price of GOLD commodity futures. Its quite volatile. How well the SP does depends on the futures contracts. To invest in Newcrest you would have to have a bullish view on GOLD.

I dont own NCM shares but sold out last time too soon - now its back below my original BUY price...

However IMO with all the bail-outs and the amount of $$$$ thrown by govts in the GFC, it could produce an inflationary environment - potentially ppl will move out of cash and into gold... thats one view I have been reading about. Time will tell.

Does anything have a similar or opposite view?

 

[prana]

With the current destruction, much M1 is being destroyed, so there may be a short period of retracement for gold on the downside, but I would say anytime now, gold would rebound. I totally agree with you in the mid to long run, these monetary policy is very inflationary, and so I can only see one direction for it over a larger time period unless the FEDS are abolished or they shed their stripes or something weird.

 

[Sean K]

I wonder if pushing up against this channel is a sell signal?

Or, if it breaks through a buy signal?

 

[johnnyg]

Id be tempted to short from here kennas, but if you look at previous attempts to break out it normally spends 3-4 days around that area so I dont think theres any great rush. Also with the price of gold heading up im thinking NCM could be breaking out of its downtrend sooner rather then later.

 

[Sean K]

Longer term resistance also around the $26 mark so maybe odds on another failure at this level. But if it breaks through ..... hmmm

 

[M34N]

Agree with what's said above, sold just under half my holdings of NCM yesterday at $25.50, it just seems to be stuck in a downtrend and probably best to get out while it was up.

But interested to see where it goes today, looks like an up (?) day, the XAU and HUI in the US were up this morning despite the gold price being down, but our goldies have a tendency to go whichever way they well feel like lately.

Kind of don't mind if it goes down or up at this point, will look at buying in again if it breaches that $20 level again, or maybe switch to SGX or LGL.

 

[sinner]

Been watching this also. My guess is the goldbug mentality which makes gold miners attractive makes those companies with high gearing UNATTRACTIVE! If you are banking on gold, you are most likely to be banking on hyperinflation: hyperinflation will send those highly geared into the bin.

Sino Gold I have been advised to stay away from because they are forced to give a portion of their production to the Chinese government.

LGL looking better and better every day, both from a market sentiment perspective and a fundamental gold bug perspective.

 

[Sean K]

Been watching this also. My guess is the goldbug mentality which makes gold miners attractive makes those companies with high gearing UNATTRACTIVE! If you are banking on gold, you are most likely to be banking on hyperinflation: hyperinflation will send those highly geared into the bin.

Sino Gold I have been advised to stay away from because they are forced to give a portion of their production to the Chinese government.

LGL looking better and better every day, both from a market sentiment perspective and a fundamental gold bug perspective.

Yeah, NCM is a pretty low cost producer and POG in AUD is doing very well at the moment.

My concern for LGL has shifted from one project risk, to excecution risk, in getting Ballarat and that thing in Africa up and running. If these don't go to plan there'll be some negative sentiment stirred up. And viccie verca of course.

With the gold juniors being hammered, I'd expect some more M&A involving these two. Plenty of tasty scraps laying about if POG continues up.

 

[Sean K]

Id be tempted to short from here kennas, but if you look at previous attempts to break out it normally spends 3-4 days around that area so I dont think theres any great rush. Also with the price of gold heading up im thinking NCM could be breaking out of its downtrend sooner rather then later.

Longer term resistance also around the $26 mark so maybe odds on another failure at this level. But if it breaks through ..... hmmm

Yep, failed again. Still one to watch around this area though I reckon. A break up through such strong resistance may be fruitful.

 

[M34N]

Yep, failed again. Still one to watch around this area though I reckon. A break up through such strong resistance may be fruitful.

Agreed kennas, I booked out half my NCM holdings at $25.50 last week, kind of suspected as soon as it hit that level it'd head down again. Will be interesting to see today with the POG still holding above $800 and trading up Friday in NY.

But NCM has been affected too much by the general market conditions and not the POG so much in that period, if things start to stabilize in the financial markets then it may break out of that channel.

 

[johnnyg]

Well with Gold down to $770 it looks like NCM's will be heading back down the channel. May present a good buying opportunity in a few days/weeks time. Just wish I kept my short position open for longer. Still learning the trade though

 

[Sean K]

Opening up with it's head juuuuuust above $26.

Will be interesting to see how this plays out.

EOD will probably be back at $25. lol

A good day/night with POG and a green DOW and it might be through..

 

[nikemi]

Yep, failed again. Still one to watch around this area though I reckon. A break up through such strong resistance may be fruitful.

Hi Kennas and everyone else,

Would you expect it to close above the trend line to say it broke up or is intraday trading above good enough?

I find today a very interesting day for NCM. Trading above 26 for most of the day and close at 25.51. Interesting....

 

[Sean K]

Hi Kennas and everyone else,

Would you expect it to close above the trend line to say it broke up or is intraday trading above good enough?

I find today a very interesting day for NCM. Trading above 26 for most of the day and close at 25.51. Interesting....

Need an EOD close above resistance line and then for that to be tested and found as support for a long term breakout call. Finished under again, so still only short term tradeable imo.

 

[johnnyg]

Well I went short again on NCM intra-day on Friday and made a nice little profit. Still having trouble on letting my winners run (possibly)?

POG was down heavily again on Friday night so it will be interesting come Monday wether NCM will react to the overall sentiment (ASX up possibly?) or follow Gold down, although it has been holding up quite well of late, I think a break below its little box its formed could spell trouble.

 

[chops_a_must]

Hi All,

Below is a snap of our Gold index the XDJ which needs no further comment.

Bankit

Looks like NCMs last few months too. Interesting juncture.

Quotes stolen from the gold thread.

Need an EOD close above resistance line and then for that to be tested and found as support for a long term breakout call. Finished under again, so still only short term tradeable imo.

Looks convincing to me. Back to where I bought it as a bottom drawer. Up 6% as it stands.