NEM: It’s time to take off the bullish momentum




Tuesday, November 17, 2015 09.30 AM / Harish Shahi, The Analyst 

A closer look on the daily chart of NEM reveals that earlier every swing was making successive lower lows and lower highs and marking the whole trend as downtrend. Stock was consistently falling down from N0.96 to N0.59 level however, some corrections can’t be ruled out.

Overall, bears are dominating the bulls consistently. When stock arrived at extreme oversold territory of N0.59 level then shown their magic at an initial stage and we have seen a takeoff momentum or in other words bullish momentum at an initial phase.

From technical perspective, we observed that an uptrend line in the form of uptrend channel on the daily technical chart is providing us bullish signal for the time being. A sustained move above N0.75 will open the way towards the N0.96 level and will signal further presence of buyers and will also provide more strength to bulls; this could trigger acceleration to the upside with N0.96 as next target.

The way bulls are reacting seems that they are approaching the 0.96 level in short term. All odds are in favor of the bulls and indicating a bullish signal.

Presently, stock is trading above all major and minor EMA lines and candles are generating bullish signal. Both investors and traders are displaying bullish tendency towards the stock for the time being.

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What Next?

Formation of hammer candlestick at the uptrend line is a clear cut indication of further bullish sentiments which is generating bullish signal.. A bullish crossover on MACD indicator is also favoring the bears. Both RSI and CCI indicators are providing bullish signal from a negative territory.

Intraday bias remains bearish on the stock as long as N0.60 level remains intact. The N0.85 level is key resistance level followed by N0.95 whereas N0.60 can be considered as key support level followed by N0.50 level.

Trade Idea:

Based on the charts and explanation above, traders and investors can buy at N0.67 for the target price of N0.85 and N0.98 level with the 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


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