Newmont Mining's Yanacocha mine in Peru
From the high of $71.62 in February 2006, Newmont Mining sold off to $44.75 in October of the same year. The stock then settled into a horizontal trading range mostly between $42 and $55 (left shoulder), declined and remained near $30 for about one month (head) and then rallied and stayed in a horizontal range mostly between $43 and $59 (right shoulder). This price action produced a bullish technical pattern known as an inverse head-and-shoulder formation (dashed lines). The recent rise to $66.12 (C) confirmed the breakout and the start of a new major up-leg. Only a sustained decline below the 40-week moving average (currently at around $54) would reverse the positive status of this stock.
Point & Figure measurements provide initial targets of $74 and $84. The large inverse head-and-shoulder formation supports significantly higher targets.
Ron Meisels is a contributor to the www.NA-marketletter.com website. Monica Rizk is the senior Technical Analyst for Phases & Cycles Inc. They may hold shares in companies profiled. Please see the site for a glossary
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