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Point & Go Figure: MSFT, NEM vs. ABX


So NEM vs. ABX, who do you like?


Market Overview:

The short-term conditions remain positive but at high-risk levels. The pattern of lower lows and lower highs persists for both the NYSE and Nasdaq Composite Percent Above 50-day Moving Average Indicators.

The High-Low Indices for the NYSE and Nasdaq Composite are positive (in columns of Xs), but there again the negative divergence - lower highs - persists.

The longer-term bullish percent Indices for the NYSE and Nasdaq Composite are both still in Xs, but the larger pattern of lower highs there also remains intact. The more narrow S&P 500 and Nasdaq-100 Bullish Percents are both still negative, and not even close to a reversal higher.

The picture of high risk these indicators paints continues to frustrate as the market indices make new highs in some cases. But a look back at 1999 shows a similar frustration period as broad indices made new highs on divergent indicators throughout the year before a downside resolution occurred.

Charts of Interest:
Microsoft (MSFT)
(Chart courtesy
Microsoft is edging closer to the key 28.50 area, a potential triple top break on a PnF basis.

Newmont Mining (NEM)
(Chart courtesy
On a long-term PnF basis (2x3 chart) NEM is technically "golden" as long as it is above the long-term trendline shown below. Based on this scale, the long-term price objective is 74 using a vertical count. If one uses the large base formed between 2002 and 2004, however, the long-term price objective is 102.

Barrick Gold (ABX)
(Chart courtesy
ABX shows a price objective based on a vertical count of 46.

This morning Goldman downgraded NEM to in-line from outperform saying the firm believes ABX is better from a risk/reward standpoint. As the above indicates, the technicals (using the price objectives on the charts) disagree.

But what about the market? Which stock is in favor? A NEM vs. ABX PnF relative strength chart shows that NEM should clearly be favored over ABX.

NEM vs. ABX Long-term Relative Strength
(Chart courtesy

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No positions in stocks mentioned.

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