NXG - Sector: Basic Materials---Industry: Gold & Silver

[mexirafa]

Hi guys,

Great to know more people are on board. I had to wait for the breakouts before jumping in......in at 3.23. The volume above the average (3m/2,757,540) confirms the breakout..

In the bigger picture we are in the begining of the new trend to the upside..

Good luck

Rafael

Thank you Melf for the great work. Applaud

[Melf Elf]

Melf Elf, what's the 'Target in Play' if we close above that 3.20-3.21 resistance!? Tia.

Se7en,

Near-term...

Target #1 - 3.29 - the 200DMA
Target #2 - 3.33 - the little Ascending Triangle that had the highs of 3.14
Target #3 - 3.35-3.36 - the gap from the Halloween Bearish Island Reversal
Target #4 - 3.53 - the high of the Bearish Island Reversal
Target #5 - 3.58 - the larger Ascending Triangle (pattern in purple on the daily)

Good luck, everyone!

[tokyopua]

Nice run!!!  Melf, you anticipated this nicely, applaud!  XNN failed to keep my portfolio green today, but NXG took over that role  in its stead

We have a somewhat formidable resistance to deal with I think in the 3.29 to 3.35 range due to hitting the 200sma (3.29 now), a resistance line at 3.31, and the gap from 3.31 to 3.35.  If we break that, next stop is 3.53  

[vivdcosta]

Melf,
I must appreciate your analysis and call. Your technical skills are awesome. You are the Man !

[Se7en]

Melf Elf, what's the 'Target in Play' if we close above that 3.20-3.21 resistance!? Tia.

Se7en,

Near-term...

Target #1 - 3.29 - the 200DMA
Target #2 - 3.33 - the little Ascending Triangle that had the highs of 3.14
Target #3 - 3.35-3.36 - the gap from the Halloween Bearish Island Reversal
Target #4 - 3.53 - the high of the Bearish Island Reversal
Target #5 - 3.58 - the larger Ascending Triangle (pattern in purple on the daily)

Good luck, everyone!

We  already cruised past target 1, 2 and 3! 

[Melf Elf]

Sold 20% of my NXG at 3.39 heading into the close here.  Gain: 9.0%

Holding 80% long.

We  already cruised past target 1, 2 and 3! 

Se7en,

Yeah, and volume is looking good, too.

Good luck, everyone, this has been nice today. 

[bocasva]

Applaud Melf Elf on your trade. 
Good profit so far, I saw your entry post and liked it but never got around to open a position; but I'm glad you guys are making a profit on this one.

[sanmiguelarcangel]

Bravo, what a good day. Went up more than I expected.  Hope we can see a continued breakout tomorrow.

[Melf Elf]

First off, I have to thank and applaud tocitygirl for this post, which got me interested in studying the NXG chart:

I just received this from sharpeyed.com and it's about NXG.

Dear Sharpeyed.com free newsletter subscribers,

More about NXG (Strong Buy Alert)

NORTHGATE MINERALS TO ENTER THE S&P/TSX COMPOSITE INDEX
http://biz.yahoo.com/iw/061211/0193598.html

Strong Buy NXG and hold it for the run! NXG will be very huge!

Reasons to buy NXG:

1> Looking at NXG's chart, the downside risk is minimal compared to short term upside potential. There is very good support at $2.82 (Hit on Sept 25, Oct 11 and Nov 17) Each time NXG has had a nice bounce off of this number.

2> NXG is in a pretty tight trading range since Dec 1: $3.10-$2.99. Seems to have good support at the $3 level in an environment where copper has taken a beating back close to $3 and gold is basing in the mid $620's and in my opinion getting ready for a run at $660-675 by January 1. Needs to break through $3.21 to make a run at $3.54 and then $3.94.
3> NXG was just listed on the TSX due to happen on December 18th.

4> NXG's cash position is great going into 2007. Negative gold production costs thanks to copper.

5> Warrant expiration at end of month taking the draw of the $3 range away.

6> Lots of potential in stock appreciation should YD results come out and the settlement of KN permitting.

7> Regardless of #6, NXG still looks to profit handsomely from existing mine activity and with its extensive cash build up (sh/c)ould look at acquiring a new mine to alleviate production concerns for the future.

I'm not familiar with sharpeyed.com, but they had a good sense of technicals (the 3.20-3.21 resistance), in addition to their opinion on the fundamentals. 

Let us know if they've got any more of these, tocitygirl, will you?   

Melf,
I must appreciate your analysis and call. Your technical skills are awesome. You are the Man !

Thank you, vivdcosta.  What was particularly nice about yesterday's TRIPLE  breakout was that we got to see in real time, a good example of how the technicals sometimes can function as lead indicators, helping us to anticipate those breakouts. 

I wrote a piece about lead indicators, coincident indicators, and lagging/confirming indicators in Melf's Workshop on the Personal Log Board about a week ago, if anyone wishes to read it.

Ahead of yesterday's breakouts, we knew in advance that we had FOUR Buy Signals in the 13/RSI, a Buy Signal in the MACD, crossing above the zero line, and that NXG was sitting at the top of the Kumo (Cloud), "champing at the bit" for a breakout.

All of that technical strength not only was telegraphing a possible breakout,  it also helped us to muscle through some resistance levels, and helped us to achieve some of our targets.

A flaw in the technicals is the fact that the 50/200DMAs still are inverted, but those generally are lagging/confirming indicators.  A Bullish Cross in those often comes after a stock already has enjoyed a decent rally, but we still want to see that at some point, for confirmation of what we already know: NXG broke out (lagging indicator).

As Rafael mentioned yesterday, the volume on the breakout was good: 2 times average daily, roughly, on both a 22-day and 100-day basis (that's what Scottrade gives me, which is fine), so that looks very good.

Bravo, what a good day. Went up more than I expected.  Hope we can see a continued breakout tomorrow.

sanmiguel,

Yes, it would be nice to see some follow-thru today, but we made a lot of progress yesterday (more than I expected, too), so we might give some back, or just trade sideways a bit.

"Former Resistance 'should be' Support," so on any pullback, we've got support at:

1. 3.29 - the 200DMA

2. 3.21-3.20 - the top of the Ascending Triangle (pattern in purple)

3. 3.14 - the little Ascending Triangle (black line), and 3.14 also is about where the top of the Big 7-month Bullish Falling Wedge is.

After yesterday's nice breakout, we really don't want to see anything under 3.14.  That would be a take down of all THREE bullish pattern breakouts (The Big Bullish Falling Wedge...The Purple Ascending Triangle...the Black Ascending Triangle). 

I'm raising my stop to 3.12, for a fractional gain on my remaining 80% long position from 3.11, although I'd be tempted to sell if our 3.21-3.20 gets violated.  That would be  sloppy.  A violatiion of 3.14 would be very, very sloppy.  I definitely would sell that.

So far so good,  I was late to the game (as usual), but I'm in @$3.18.  Good call Melf Elf

Shaker,

Your 3.18 entry wasn't late at all.  That was the breakout of the Bullish Falling Wedge, and you were in ahead of the 3.21-3.20 Ascending Triangle breakout.  You did just fine.

In fact, everyone buying the breakout above 3.21-3.20, like Rafael, also did fine.  Nothing at all wrong with waiting for the actual technical breakout.  We might not have gotten it.

Good luck with this one, everyone.  I hope that we all can make some nice $$$ on it.  I appreciate everyone's participation and feedback.  Thank you. 

[wzhang]

Today NXG volume is good, up 3 cents, I think tomorrow it will touch 3.53

[mexirafa]

Question?

Could these warrants have an impact in the price development?
http://biz.yahoo.com/iw/061129/0189677.html

Thanks,
Rafael

[Melf Elf]

Today NXG volume is good, up 3 cents,

wzhang,

Yes, another 5 million share day. 

We finished on a Bearish Doji Star Hangman, but after Tuesday's big breakout, yesterday's trading looked more like a high-level consolidation of the gains rather than anything bearish.  I only would be concerned if we put in a big black candle today, and close below the 3.21-3.20 Ascending Triangle breakout.

I think tomorrow it will touch 3.53

That would be nice. 

Stepping down the fibonacci sequence in the RSIs, the 34RSI had a bullish thrust above its shadow, the 55RSI, on Tuesday's rally.

We can see from this 34/55RSI chart that the only other occurrence of that since the correction began last May, was in October, when NXG failed at the top of the Bullish Falling Wedge on a Bearish Island Reversal.

On all other attempts by the 34RSI to climb above its 55RSI shadow, it failed.

On this go-round, the 34RSI got above its 55RSI shadow on Friday, December 15.  It pulled back to Bullish Synchronicity on Monday, December 18 when NXG printed 3.17, right at the top of the Bullish Falling Wedge, but closed down two cents to 3.10.

That made 3.17, Monday's high, the Buy "pivot," and a print of 3.18 (where Shaker made his brilliant entry into the stock  ), the actual Buy Signal.  3.18, everyone will remember, also was the technical breakout of the Bullish Falling Wedge.  Nice.

So, in addition to the FOUR Buy Signals that we got from the 13/21 RSIs, we've got a technical Buy Signal out of the more intermediate-term 34/55RSIs, at 3.18. 

It's important that it doesn't "roll over and die," like it did in late October, which is why we don't want to see 3.21-3.20 support, or 3.14 support get taken down.

Question?

Could these warrants have an impact in the price development?
http://biz.yahoo.com/iw/061129/0189677.html

Rafael,

I doubt it, or we wouldn't have broken out and rallied to well above $3.00 just a week ahead of that expiry, if trading publicly next week at $3.00 were a threat, but check with your broker if you're concerned about it.  Ask to have the mechanics of the warrant exercise explained to you, and then explain it to us, will ya? 

[Melf Elf]

I only would be concerned if we put in a big black candle today, and close below the 3.21-3.20 Ascending Triangle breakout.

Unfortunately, that might be just what we get today. 

CNBC even featured the copper stocks this morning,   

That type of thing used to be enough to "scare me" out of a trade, then I'd find the stock up the next day, and in the following days thereafter.

The technicals have been so strong on this breakout in NXG, I want to give it as much latitude as possible, however, given the fact that copper is looking so lousy, I recognize that NXG is being dragged down "in sympathy," even though it isn't a pure play in copper.

As all of you know, I'm a technician, so I don't bother much with trying to figure out the interplay between the commodity and the stocks.  If I did, I probably wouldn't have played NXG, because copper already was looking pretty lousy, and that would have put me off it.

We've already broken below the 200DMA today, which is at 3.30

3.22 is .618 fibonacci retracement of the breakout candle.

3.21-3.20 is the top of our larger Ascending Triangle (pattern in purple) breakout.

I've decided to be a little more demanding of NXG in this environment, and to sell it if it's set to close below 3.20. which would give me a little better than 2% gain on my remaining 80% long position.

Just wanted to give all of you a heads up, so you can make your own decisions.

The low in NXG, so far, is 3.25.

NXG currently is BID 3.30...ASK 3.30, right at the 200DMA.

Good luck, everyone!   

[Melf Elf]

Oh, swell...Cramer just called for a COLLAPSE in Copper, say, "I don't want anything to do with copper.  Sell Southern Peru..."

If tha-at doesn't put us back below 321-3.20, we might be okay. 

NXG is hanging in there, still at the 200DMA.

[calven]

Heres what I have as far as TA - I see major support at 3.20 (much below this and Ill look for an exit)

In at 3.29 - Perfect entry would be $3.22-3.25

3.13 stop loss