NEM: Bulls are making the base to take off


Tuesday, August 18 2015 08.38 AM / Harish Shahi, The Analyst 

A closer look on the daily chart of NEM reveals that earlier stock was falling down and  making successive lower lows and lower highs; heading towards south side. A downtrend line is also lying on the daily technical chart which is providing supply pressure.  Bears were controlling the game and dominating the bulls at every nooks and crannies.

After arriving at N0.60 level bears are struggling to decline further and the way bears are unable to move on further downside seems that the bottom out process is going on, at the same time bulls are trying their best to get the price at upside. This is an early reversal signal and we will get further confirmation once stock trades and settles above N0.70 level.

There may be a lot of demand in the market and N0.60 continued to be a very strong support. The short term trend is down according to the daily swing chart, and momentum appears to be in favour of the upside. A sustained move above N0.75 will signal the presence of buyers and will provide more strength to the bulls; this could trigger acceleration to the upside with N0.95 as next target. 

All odds are in favor of bulls and indicating a bullish signal. Presently, stock is trading below all major and minor EMA lines but candles are generating reversal signal. Both investors and traders are displaying bullish tendency towards the stock for the time being.

To View Technical and Interactive Chart with Indicators like MACD, RSI, Stochastic, Moving Average, Bollinger, Williams %R, MFI ... Click HERE

What Next?

A piercing candlestick followed by bullish marabuzo candlesticks at strong key support level is providing us some reversal signal. Both RSI and CCI indicators are providing us trend reversal signal from oversold territory and generating bullish signal.

Intraday bias remains bullish on the stock as long as N0.50 level remains intact. The N0.80 level is key resistance level followed by N0.95 whereas N0.50 can be considered as key support level followed by N0.40 level.

Trade Idea:
Based on the charts and explanation above, traders and investors can buy at N0.65 level for the target price of N0.85 and N0.95 level with stop loss of N0.55.  The tentative time frame would be 8-10 days.

NB: Return on Investment based on trade idea above does not take cognizance of brokerage commission charges   

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To View Technical and Interactive Chart with Indicators like MACD, RSI, Stochastic, Moving Average, Bollinger, Williams %R, MFI ... Click HERE

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