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Newcrest has run well the last few months along with the tick up in the gold price. Since mid February however, you will notice that as the share price was heading higher, momentum was dropping on the RSI. This divergence has now pushed NCM out of its recent uptrend. The breaking of this uptrend was done on fairly high volume, as investors became nervous about the US Federal Reserve’s next move. With tapering still underway and interest rates in the US looking to tick up sooner than expected, the gold price will continue to be under pressure. NCM has some support around $9.80, but considering how impulsive the move down is, I would expect that support to not hold for long. NCM is still in a longer term downtrend. The arrows on the chart show you that it has once again formed another “lower high”. As a result, it could potentially form another “lower low” which would imply levels under $7. If it can find a good low above $7, then NCM starts to look interesting again on the long side.
