NCM has been trending very nicely since the lows in June by forming a series of higher highs and higher lows. You will notice on a few occasions that the stock has jumped up and rallied $2 within 3 days on very high volume. Yesterday saw NCM stage another stellar performance on very large volume. NCM is by far the biggest gold stock on the Australian market so when fund managers need to get exposure to gold again, most of the money flows into NCM. So this volume increase on the moves up suggests that retail investors are no longer the only ones taking punt on gold, but serious money is coming in at these levels. So while it may seem that “NCM has already rallied”, we still believe that it has further to go and we are much more confident now of achieving a $16 price target. We need to see NCM continue making higher highs and lows, so a breach of the previous low is a sign for traders to exit the stock.
