NCM volume spike
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     thommo78
Member
Username: thommo78
Post Number: 96
Registered: 05-2005Rating: N/A
Votes: 0
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| | Saturday, November 26, 2005 - 10:03 pm: |  
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Hi HC, hope you don’t mind me starting a thread here .. love your posts (keep it up!) .. just wondering what’s your take (or anyone else’s) on the NCM daily chart – I know from previous threads that you consider volume vs price action very important. My thought is that you could take the volume vs price action on Friday in two ways:
1) positive – ie sellers were relentless dumping significant volume on the market only for the buyers to soak it up all day – price traded in a narrow range without falling much, closing above support around 20.50.
2) negative – ie buyers were out in force but despite significant volume could not push the sp higher (ie no follow-through on the upside) due to persistent selling.
Just wondering what your take is…?? I’m long NCM as of the middle of Nov so I am hoping the volume spike and narrow range is positive?? At the least I would expect that as the sp did not fall much (and closed of it’s intraday low and above the midpoint of Thursday’s strong blue candle) that this must be positive?? Thanks very much … Tom
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holycow
Member
Username: holycow
Post Number: 2166
Registered: 08-2004Rating: N/A
Votes: 0
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| | Sunday, November 27, 2005 - 10:51 am: |
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Hi Tom,
You're ALWAYS welcome to start a thread here if you like, and I will be happy to add my two bits if it helps. Nothing beats seeing people making money 
With regard to your question on volume spike, I find your assessments are close to what I would be making, except there's one aspect of event that we have to take care of, ie, the volume on Friday has been heavily impacted by off market option transactions. (You can download these data from your online broker and check them out).
So if we were to consider this off market action, I think it won't be correct for us to assume the above assessment to be business as usual, or "normal" as in everyday happening. What I will do is probably wait for another couple of days and see how the sp behave after all these off market events.
The above comment is base on our Volume Spike observation only.
The following is how I see the SP of NCM moving forward with regard to its chart pattern and its main product - gold.
1) keep in mind on the 30 Sep, NCM reaches its all time high of 21.50 and if you were to look at the chart, it was sold down almost "immediately" in the next day. The profit taking has been quite quick and severe. When the SP tries to make a second run for the top on the 18/10, it was dealt with in a similar fashion, except this time, it was more ruthless - I think, primarily due to its cost blow out in Telfer and some poor forecast (from memory, so could be wrong).
On 19/10, the SP lost almost $2.00 in a single day. And in 3 days it lost almost 3.40 from a high of 20.60 to a low of 17.20 - we should make a note here and keep this "precedence" in mind - do we want to be bitten by the same snake twice? And in the same spot?
2) The question I will ask myself typically on situation such as this is - the recent peak of NCM was 21.25, currently the SP is trading at 20.67, there's another 58c, or 2.8% more to go for ASSUMING a similar seller thinking or the same group of sellers are waiting to cash out at a similar level - this will be your call here - WILL you hold out to see what they will do next for another 58c? (the sell down can be more than 58c)
3) The upside assessment I will put myself through is - currently GOLD is hot, it is reaching a new high and chances are high that it will break the US$500 mark, with that break through, NCM has every chance of making higher ground with the strong sentiment and momentum coming from gold speculators - WILL it WORTH a punt here with NCM hoping that it will return you more than just 58c?
4) If I am in your position, I would have cashed out 50% of my position just to play safe because a) I hate losing my profit; b) I think the risk/reward is sitting right on balance here 50:50, and since I am in profit, taking some off means I am slightly ahead; c) I still have 50% left to punt if gold were to be charging higher (keep this mind all the time - NCM reaching new high is due to gold price hike; it still has its cost blow out and profit downgrade -these won't go away so easily; in a way I am saying we are speculating on gold here)
On c), the decision to bail or hold on will depend on the NEXT two days SP performance, if the selling seems to be very active - like you can actually see/feel people are more happy to sell than buy in the intraday action, and if you see a lot of big lot selling, small lot buying - I'd interpret that to be big players selling to small players, sooner or later the big fella will overwhelm the smaller ones - I won't hang on to find out if gold will hit 500 or not. I will bail to avoid the risk and to protect my profit.
But if the seller/buyer actions are reversed of what I have described, I probably will hang in there because gold breaking 500 will bring on quite a bit of gold fever.
5) To justify my readiness to sell, I am of the school that there will always be opportunity somewhere, or sometimes later, so if I were to miss out more profit (sometimes can be substantial), I am still happy as long as I am not losing. IN NCM's case, looking at the longer term weekly chart for example, if GOLD were to move higher I believe NCM will definitely give me another go at it.
Another thought worth considering at this point too is if you are a trend rider, holding on make sense - say if you were to enter in 2003 you have a lot of "profit buffer"; but if you were to enter in Nov, your position actually is quite "risky" because of the lack of thick profit buffer.
Cheers and caveat emptor.
NCM Weekly
ps: note the volume since April 2005 has been increasing and almost 1.5X to double that of prior years.
HC
"... if you've got a chart, I have an opinion!"
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holycow
Member
Username: holycow
Post Number: 2171
Registered: 08-2004Rating: N/A
Votes: 0
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| | Monday, November 28, 2005 - 03:19 pm: |
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... I think after today, it's a hold and ride since the profit buffer has "thickened" substantially
HC
"... if you've got a chart, I have an opinion!"
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thommo78
Member
Username: thommo78
Post Number: 97
Registered: 05-2005Rating: N/A
Votes: 0
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| | Wednesday, November 30, 2005 - 10:20 am: |
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Thanks for all that hc .. i'm thinking there must be some sort of correction in gold here somewhere .. i'll be ready to fatten up my gold positions when this happens .. cheers
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holycow
Member
Username: holycow
Post Number: 2183
Registered: 08-2004Rating: N/A
Votes: 0
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| | Wednesday, November 30, 2005 - 01:26 pm: |
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NCM weekly
HC
"... if you've got a chart, I have an opinion!"
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holycow
Member
Username: holycow
Post Number: 2200
Registered: 08-2004Rating: N/A
Votes: 0
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| | Thursday, December 01, 2005 - 09:57 pm: |
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NCM Daily Dec 1
HC
"... if you've got a chart, I have an opinion!"
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