NEM finds buyers at key support level
Newmont Mining Corporation (NEM) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
NEM ended the week 4.77% higher at 32.04 after losing $0.68 (-2.08%) today, strongly underperforming the S&P 500 (1.42%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (NEM as at Oct 12, 2018):
Friday's trading range has been $1.17 (3.61%), that's above the last trading month's daily average range of $0.81. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NEM.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar.
After trading down to 31.37 earlier during the day, Newmont Mining bounced off the key technical support level at 31.61 (S1). The failure to close below the support might increase that levels significance as support going forward. When prices bounced off a significant support level the last time on Tuesday, NEM gained 1.49% on the following trading day.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 30.87.
Though the share is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the nearby swing high at 32.90 where further buy stops might get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Newmont Mining. Out of 497 times, NEM closed higher 56.14% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 52.11% with an average market move of 1.13%.