NCM - Newcrest Mining

[Redwings]

I'd be kind of worried about why NCM would need this kind of money, according to their press release they are repaying $AU364m in debt, so why would they need double that (if true)? They did mention expansions in NSW and Indonesia but my understanding this is only about $150m or so, so where would this other $250m go?

I'm thinking about the $27.00 offer price and where this came from as well, why offer a ~13% discount to your share price if you are doing well and don't need the money other than to reduce debt? Seems like a hefty discount and similar to something CBA did a while back when they announced some write-downs. I have been looking for an entry point to jump in to NCM again but this has made me think twice.

Have been trying to find something published to confirm and back it up but so far nothing so let's hope it won't be $750m... unless they intend to use it to get OZL's PH mine for a song at $250m

 

[justiceotp]

Make sense for them to grab the extra money while its there, gold is the hot item at the moment and if they can grab 750m they should, will be plenty of good opportunities for them to spend it on shortly.

 

[Sean K]

First bounce after the consolidation around where we thought.

Positive sign to me, but I'm cautious pending overall market next leg down capitulation into the abyss...

Consolidated very well above the short term $28 support even after the cash grab for no apparent reason. The break through those major resistance lines looks pretty good for now and is that a pennant there with the pole $18 to $34? Nice. Maybe not, it supposed to be a continuation pattern. Maybe at least a triangley thing in there which gives a target of previous highs.


Symmetrical Triangle

Trend: In order to qualify as a continuation pattern, an established trend should exist. The trend should be at least a few months old and the symmetrical triangle marks a consolidation period before continuing after the breakout.
Four (4) Points: At least 2 points are required to form a trend line and 2 trend lines are required to form a symmetrical triangle. Therefore, a minimum of 4 points are required to begin considering a formation as a symmetrical triangle. The second high (2) should be lower than the first (1) and the upper line should slope down. The second low (2) should be higher than the first (1) and the lower line should slope up. Ideally, the pattern will form with 6 points (3 on each side) before a breakout occurs.
Volume: As the symmetrical triangle extends and the trading range contracts, volume should start to diminish. This refers to the quiet before the storm, or the tightening consolidation before the breakout.
Duration: The symmetrical triangle can extend for a few weeks or many months. If the pattern is less than 3 weeks, it is usually considered a pennant. Typically, the time duration is about 3 months.
Breakout Time Frame: The ideal breakout point occurs 1/2 to 3/4 of the way through the pattern's development or time-span. The time-span of the pattern can be measured from the apex (convergence of upper and lower lines) back to the beginning of the lower trend line (base). A break before the 1/2 way point might be premature and a break too close to the apex may be insignificant. After all, as the apex approaches, a breakout must occur sometime.
Breakout Direction: The future direction of the breakout can only be determined after the break has occurred. Sound obvious enough, but attempting to guess the direction of the breakout can be dangerous. Even though a continuation pattern is supposed to breakout in the direction of the long-term trend, this is not always the case.
Breakout Confirmation: For a break to be considered valid, it should be on a closing basis. Some traders apply a price (3% break) or time (sustained for 3 days) filter to confirm validity. The breakout should occur with an expansion in volume, especially on upside breakouts.
Return to Apex: After the breakout (up or down), the apex can turn into future support or resistance. The price sometimes returns to the apex or a support/resistance level around the breakout before resuming in the direction of the breakout.
Price Target: There are two methods to estimate the extent of the move after the breakout. First, the widest distance of the symmetrical triangle can be measured and applied to the breakout point. Second, a trend line can be drawn parallel to the pattern's trend line that slopes (up or down) in the direction of the break. The extension of this line will mark a potential breakout target.

 

[Sean K]

Looks like it might be breaking up from this pennenty triangly formation but $34 is going to be tough to break and that will be the key imo. Looks like it's going to open up around $34.50 so looks prospective. Had a great run since the 'bottom' amd break up through the $26.00 mark.

 

[M34N]

Looks like it might be breaking up from this pennenty triangly formation but $34 is going to be tough to break and that will be the key imo. Looks like it's going to open up around $34.50 so looks prospective. Had a great run since the 'bottom' amd break up through the $26.00 mark.

It's tracking the POG pretty consistently lately so no surprise (like the other goldies). I'm waiting to see a reasonable retracement in the POG first before a jump back in, or maybe even a dip into another minor gold miner since NCM is pretty cashed up and may be looking for a takeover target in the sector.

LGL, SGX and SBM seem to be doing pretty well and following a similar pattern to NCM so it's not unique to the company. You planning on adding any NCM to your portfolio kennas? May be a bit dangerous buying in now following the strong run up like you mentioned so I'm happy to wait for a pull back, whenever (if ever) that may be!

 

[Sean K]

It's tracking the POG pretty consistently lately so no surprise (like the other goldies). I'm waiting to see a reasonable retracement in the POG first before a jump back in, or maybe even a dip into another minor gold miner since NCM is pretty cashed up and may be looking for a takeover target in the sector.

LGL, SGX and SBM seem to be doing pretty well and following a similar pattern to NCM so it's not unique to the company. You planning on adding any NCM to your portfolio kennas? May be a bit dangerous buying in now following the strong run up like you mentioned so I'm happy to wait for a pull back, whenever (if ever) that may be!

Yeah agree with your points. In regard to NCM, I thought the bounce off the $28 was a good opportunity, and now breaking up through $34.00 (if it does EOD) looks like another. I am kicking myself for not having more conviction about LGL and NCM (which I've held for years) and not topped up at lower prices.

 

[Sean K]

Yeah agree with your points. In regard to NCM, I thought the bounce off the $28 was a good opportunity, and now breaking up through $34.00 (if it does EOD) looks like another.

Looks to be struggling with $34.00. Potential evening star looming, which looks untidy short term. Hoping it stays above.....Article in the Fin this am discussing possible NCM and LGL merger, which happens at least 10 times a year. Wish they'd just hurry up and get it over and done with.

 

[Redwings]

Anyone taking up the SPP offer?

Just got the letter today and was wondering if anyone is taking it up, for how much and if you guys think it's a good deal.

thanks.

 

[Sean K]

Anyone taking up the SPP offer?

Just got the letter today and was wondering if anyone is taking it up, for how much and if you guys think it's a good deal.

thanks.

If you want more shares, and you think they're going to trade over $27 by the issue date, it may be a good deal. Comes down to some portfolio balance. Do you want to be heavier in NCM? Should you be more diversifiedin in the longer run and buy another another gold company or another industry? Or, if it's going to be trading well above $27, there's potential for a stag profit. I can't see it running too far away from the spp, and it has had a great run, and gold may correct again shortly. So, the definitive answer: Maybe. : LOL

Good luck with your decision.

(I'm taking up the full allocation, which isn't really much anyway)

 

[Redwings]

If you want more shares, and you think they're going to trade over $27 by the issue date, it may be a good deal. Comes down to some portfolio balance. Do you want to be heavier in NCM? Should you be more diversifiedin in the longer run and buy another another gold company or another industry? Or, if it's going to be trading well above $27, there's potential for a stag profit. I can't see it running too far away from the spp, and it has had a great run, and gold may correct again shortly. So, the definitive answer: Maybe. : LOL

Good luck with your decision.

(I'm taking up the full allocation, which isn't really much anyway)

Hi Kennas,

Thanks for sharing your thoughts.

Well, I am a little heavy on mining already and as far as other producers, my conservative nature doesn't think getting in LGL might be a good idea due to the sovereign risks and I may have missed the boat (was looking at it when it was $1.50) on that one.

Am torn between if I should put the budget of $2K into the NCM SPP or just buying the bullion GOLD on the ASX.

 

[Sean K]

Looks to be struggling with $34.00. Potential evening star looming, which looks untidy short term. Hoping it stays above.....

Nice hammer 2 days ago just holding at $34 and then yesterday quite a break up. Gold still running, so NCM looks good to keep going. Been a great run since that break up at $26, but adding more at $16 might have been nice. Next resistance all time high perhaps? Markets imploading and gold stocks doubled from the lows. Nice.

 

[M34N]

Nice hammer 2 days ago just holding at $34 and then yesterday quite a break up. Gold still running, so NCM looks good to keep going. Been a great run since that break up at $26, but adding more at $16 might have been nice. Next resistance all time high perhaps? Markets imploading and gold stocks doubled from the lows. Nice.

Wish I had of jumped in after the buyback and it hit the $29.00 levels, hesitated as I figured it wasn't a support level and it kept rocketing higher.

Congrats on the hold kennas, I got out of this one way too soon and didn't foresee the rise in gold like this to be honest. People have been predicting it for ages but was expecting a similar fall in the goldies like the last leg down in the markets and didn't want to risk it. Well at least FMG and a couple others have done well for me :

 

[johenmo]

Article in the Fin this am discussing possible NCM and LGL merger, which happens at least 10 times a year. Wish they'd just hurry up and get it over and done with.

Who's supposed to takeover whom? NCM buying, I presume. Haven't looked at Gold stocks until recently.

 

[Sean K]

Who's supposed to takeover whom? NCM buying, I presume. Haven't looked at Gold stocks until recently.

Would be a 'friendly merger' if it was to happen imo. If one was going to take the other, NCM would have to offer a sizeable premium for LGL and then there'd be the risk of a bidding war from one of the other majors.

This rumour pops up every year though. As it should. Seems like an obvious fit.

 

[Boggo]

I have been following NCM for a while now, the current price drop is not unexpected from a charting perspective.

The top pic was the view in mid Jan, Wave 5 target of around $36.

Bottom pic is yesterdays, Wave 5 has become more of an ABC pattern but it has still hit a top around the original W.5 target.
I am not sure how valid the current W.5 is with that pattern ?

Would be interested in an AGET chart of this. (tech/a ?)

(click to enlarge)

 

[tech/a]

Boggo

Further to your PM.

There are a few AGET counts.
This first one is very similar to yours.

However there is another count which seems to coincide better with the weekly count.

First the daily

And now the weekly.

This can actually all workout correct ---if.

There is now 3 waves down in a corrective move ABC
Forming a new wave 4
Then finally a wave 5
Which would then see the wave count in chart 1 alter to a complete 5 wave count. Obviuosly the current wave labelling would alter.

But I think its safe to say that we are in for a correction on this chart.

One to watch.

 

[Boggo]

Thanks for that tech/a.
With Marketech I am limited to about a dozen stocks that can be traded long and short, NCM is one of those and its playing by the rules at the moment, the daily gaps make it harder to trade though.

Your second chart is interesting, ie. w.3 completed and a possible w.4 between $32 and $30, it also fits with the weekly, lets see how this pans out.

MTPredictor did predict the w.4 and w.5 targets accurately but it has now discarded the w.5 pattern for an ABC. It obviously doesn't like the shape of the w.5.

(click to enlarge)

 

[Sean K]

This isn't going to plan at the moment. Gold up from Friday I think yet NCM falling off and through what should have been new support at previous resistance at $34.

Profit takers taking over I guess. Had a good run...

 

[prana]

I sold for some short term volatility at 34. USD $1000 is quite a support line and broke, with AUD rising now, may see some sideways trading. Also the recent allocation means a lot of traders, would have sold some holdings onto the market increasing the volume. This would only short term. If gold keeps climbing, I think I'll keep holding some....

 

[Aussiest]

Should be interesting to see if it holds at $30, or down to $28.50?......................................