3SOF

Anyone have any new TA perspective on NXG? Seems to me like we are just battling 3.60 resistance for now... Would love to see the 200 day MA hold.

calven

Hey Calven,

Haven't really been following NXG, but had a little look at the chart, and to me it looks like NXG is really chomping at the bit for a breakout.  The long term chart shows 2 ascending triangles, the one that formed over the summer broke down in September, finding support around 2.80.  As far as I can tell, that was basically the target of the triangle breakdown.  The ascending triangle that has been forming since now looks like it is set to break to the upside.  I give it a target of (3.53-2.62 = .89, + 3.53) = 4.42.

However, as I know you already experienced, it had an upside fakeout at the end of December that broke to the downside, actually piercing the bottom of the triangle, but held it on a closing basis.  I have to say, that took some resilience to hold through, as when it breached 3.00 intraday it must have been looking REAL ugly!!

In addition to this, as you have pointed out previously, there is a large symmetrical triangle on the 1 year chart that broke out in December and the subsequent breakdown made a succussful retest of the support line of this large triangle.  This to me also suggests upside continuation over the medium term.

Right now, NXG has already tested the upside resistance area twice in the last 3 days, topping out at 3.55.  Fridays candle was an inside day, which suggests a bullish resolution.  I agree with you and wouldn't like to see NXG close below 3.40 (the 200MA and also horizontal support).  This would suggest another retrace back to ascending support.  Also a third failure at this resistance level, could signal another triangle breakdown.  As a potential new entrant into the stock, I am looking for a clear breakout from this resistance level, which would be a candle that is set to close over 3.55, key short term resistance.  Note also that the last 4 months have developed into an ascending channel which currently tops out at 3.90, the resistance level of the previous triangle.  That would be my short term target on any breakout, as NXG may need a real push to get through this level.  But if it does, I could see it moving up to make that AT target around 4.42, as NXG has only seen a few weeks of trading above $4.

Thanks for your help buddy. Now the only major thing I see for NXG is HEAVY resistance at 3.90 (the top of the ascending triangle breakdown months ago)

My price by volume charts also indicate HEAVY resistance there. Any thoughts on that specifically? I know you commented on it at the end - but whats it going to take to get us through that? Metal prices dont seem to be helping at the moment.

Right calven, jumped in with you this morning at 3.55.  Loks like we got the break there.  First target is clearly 3.90, and I may look at taking some profits there.  It seems like there is a lot of talk about gold pushing through 640-640 resistance, which would bode well for the sector.  Do you know what the ticker is for gold futures?

Hey, I own NXG and KRY - I see gold going above 700 this year.

I go to www.kitco.com for gold quotes. For copper you can go to kitcometals.com - Not sure on a ticker though.

I was also looking into buying some Natural Gas stocks shortly. I would love for Natty gas to make a major dip - $NATGAS (ticker) I ABP & NGAS

Copper looks like it could rebound or at least base here as well...in case you didnt know NXG mines gold AND copper.

GOTTA love yesterday and todays candles above 3.60 resistance!

cal

Absolutely!!  And how it broke 3.64 towards the end of the day, it had been sitting there all day!  I think we will see continuation tomorrow, NXG (and AUY which I also bought just recently) feels strong right now - next stop 3.90.  Might look into a copper play again - maybe TGB or PCU?

We filled that tiny gap to 3.80 today. Not even sure if that had anything to do with todays top. Any thoughts here going forward. Maybe a 3-4% sell off tomorrow - profit taking and slight gold weakness?

Not sure if nxg will make it to 3.90 gold -3.20 in the spot market as of 2:55 ET

Calven,

I'm looking to just sit on it and ride this one with a stop just below the september gap of 3.48.  It could get a little bit of trouble with the 3.80-90 area, but I like the development of this chart, with the big symmetric triangle breakout and the more recent ascending triangle breakout.  Any pullback should I hope find support around 3.55, and sitting where it is I think there is a decent chance of getting that breakout above the key 3.90 level in the next few weeks.  Need to do more DD on this one and have a look into earnings etc to see whether we could have a catalyst for this move in the near future.

NXG could be a good aquisition target... TONS of cash.

Furthermore, NXG's gold and copper are hedged- meaning regardless of metal fluctuations they sell at that given price. Nevertheless, gold and copper going up is not a bad thing.

ALso take a look at natural gas....ABP i like - todays candle was awesome...maybe a 3.25 entry for me. (1/4 position to get my feet wet) then add the last 3/4 when i see where ngas is headed. POSITIVE divergence on the $NATGAS chart today.

Have a look at the competitor and industry breakdown for NXG.  I just can't figure it out... why is NXG SO CHEAP?

http://finance.yahoo.com/q/co?s=NXG

It has a P/E of only 6.7 compared to an industry average of over 30, it is growing fast, (yoy rev growth for 06 is expected to be over 30% based on analysts forecasts for this Q).  It has a very strong balance sheet, with a current ratio of over 5, as you said loads of cash, very little long term debt.  OK its much smaller than the competitors posted here, but I'm really not sure what is discounting this stock so heavily.  Even at a P/E of 16, on current 06 eps estimates of .56, this stock should be trading at $9/share.  Just doesn't add up.

Is there a spanner in the works here or is NXG just massively undervalued?  I might see i I can get David to have a look at this... he might have an idea.

Been in NXG with some nice profits and bought more (recommended by Sharpeyed) based on the potential.  Seems undervalued to me, but I'm not really sure about the timing of the moves. 

Good analysis.

I know they added more shares...also are hedged below current gold prices which is somewhat negative...

idk have david check it out on the video analysis section

I think we figured out the reason for the discount.  For some reason (perhaps because they are a Canadian traded company also on AMEX they do not provide any of their filings with/to the SEC.  Can't find any 10Qs on them anywhere.  Maybe they are available through their lsiting on the TSX.

Anyway, without clear reporting and financial visibility, its pretty obvious that Wall St would not be keen to invest.  I don' know, NXGis having a hard time with 3.80 resistance here, I'm beginning to think it might be better to put my money into a NYSE listed gold stock instead - after all the DOW is rocking right now, and maybe look to buy NXG back on the break.  We haven't even moved into the 3.80-3.90 range yet and I still anticipate significant resistance throughout this area.

As you say if their gold and copper prices are hedged, it may make it tough for them to realise much from a rebound in metal prices.

Well gold and copper prices rising is never a bad thing for NXG ....

We are also about to get some volatility VERY soon.  An ascending triangle with a neckline of 3.81 and support line at 3.70 is there. (60 min 2 week chart in scottrader) If this drops below that support line i may bail and take my heavy gains. Got to remember 3.80-3.90 is HUGE resistance. There are lots of bagholders at 3.90 that got burned during the drop in September. We get above 4.00 and we make a run at all time highs 

Lots to think about- seems like good risk reward. With gold so strong I dont see how I can sell just yet. Right now it seems as if those bagholders are being absorbed at current levels. Clear skies if we get through that.

Also keep an eye on the short % - over a million shares short, worth about .30 in a cover situation.

GL
calven

I sold my NXG today at 3.78, liked the early move above 3.80, but when it turned back below 3.80 my mood soured a bit.  (Actually, I decided to go on a bit of selling spree today, just to lock in some profits and clear my books a bit.  I reckon that I willwait it out for that break above 3.90 to get back in.  I may have to pay up for it though.  In the meantime I may well  put some cash in some other gold stocks.  Man I wish I'd picked up some PCU too!!!