The basic Trading Indicators for Newmont Mining (NYSE: NEM) are giving signals of a downturn in the stock price. Then, of course, there are fundamental reasons for gold and gold mining stocks to be languishing for a bit at this time due to the recent strength of the US Dollar.
We are looking at the NEM chart with the plot for the 10-day and the 50-day moving averages. We see that around middle of December 2009, the 10-day moving average went down and crossed the 50-day moving day average on the way down. That typically is a bearish signal for traders and tells us that the stock price is headed down in the near term.
These are small duration moving averages that we are using. So, typically we wait for the indicators to show proof that it will continue with the trend which NEM has in this case. So, our near-term outlook on NEM is that it will stay under $45 for a few weeks at the least.
Accordingly, we are buying the NEM March 2010 $45 put option contracts to make some gains. Our buy-in price is at a premium of $245 per contract and we hope to reap some rewards soon on this trade.
This is our second trade in NEM. Readers may remember that we made some good gains in NEM put options last October. Lets hope this trade is a profitable one as well.
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We are trading contracts in the Australian Dollar (XDA) put options. This is the AUD (Australian Dollar) against USD (US Dollar) FOREX instrument that is traded in the Philadelphia stock exchange. We are buying put options which means we expect the AUD to fall against the USD.
