Testing breakout levels on the short and long term charts. Took a position today at $17.46 :)
The stock needs to break 17.65 and we get a blue skies breakout!
Is it still a good buy or should I wait for a dip?
There really isnt too much downside risk. ABX tried to takeover NG a while back.... meanwhile MNG was just bought out by Newmount (NEM) - LMC and NG are again on the chopping block with big assets in gold and other precious metals. This company is worth $21.00 per share right now and $23-25 on a buyout - thats why I bought it. Not to mention the year and a half consolidation channel breakout.
We may get another small correction before another move higher. I may add more between 17.50-18.00 Hope that helps... :P
Thanks, I've just started to get back into trading. I've forgotten a lot.
NG is a great company with real potential. Two of the best gold plays are ABX and NG. With ABX being serverly over extended I believe NG is the next best play. Coincidentally I discovered that ABX actually made a bid for NG about a year ago - "low balling" with a bid of $16.00 per share they were unable to purchases the company.
When management doesn't take a buyout offer 33% higher than current price per share ($12.00 July 06 offered $16) YOU KNOW that they have HUGE confidence in the company. Furthermore, that they think $16.00 WASNT high enough. Therefore NG seems to have a safety net at $16.00, since the company has much improved since the bid a year ago. That means you have a VERY special situation in that the upside is very high will downside risk is like $16.00 (Id like to think ABX or some other mining company would scoop up NG if it for some reason got below $16.00)
Yet another positive event just occured - Newmount Mining just bought MNG for a 25% premium. They could even take a stab at NG. I'll be doing an in depth report on NG in coming days but based on my initial analysis I see upside of $6-8 per share ($26-27) target from here! Downside of course is $16.00 (where ABX offered a buyout at $16.00)
So From the current price 18 and change: $2.00 Downside Risk vs $7-10 upside risk!
I like that setup! Lastly, keep an eye on the underlying commodity. If gold prices slide this changes everything I said. Watch http://www.kitco.com for these prices... As NG shareholders we want gold above 700 ounce.
Hope this helps! If you want to check my website out http://www.chartsetups.com - Ill be doing a report on NG by the end of the week. Otherwise I was able to find this somewhat outdated report on the company: http://mofmagicalthinking.com/files/NG.Note.06.10.25.pdf
I plan on doubling my position in NG betwen 17.50 and 18.00
GL Happy Trading!
Calven
Here is my final value analysis of NG: http://www.chartsetups.com/articles/54/1/NG-Undervalued-Gold-Play/Page1.html
Anywhere under $18.00 is a good entry! ;)
updated chart look.......