ALGO Update: Stay Long Evolution Mining

Posted on | by Todd

Our ALGO engine triggered a buy signal for EVN on August 1st at $2.83.

Since then the share price has ranged traded between $2.60 and $2.90, which is understandable since the price of Spot gold has also range traded between $1210 and $1190 during the same period.

It worth noting that in EVN’s recent three-year outlook statement, the gold miner expects production costs to remain around AUD 870.00 per ounce and production to increase to over 700,000 ounces per year.

As such, we expect EVN to trade back over the $3.50 level over a 3 to 6 month time horizon.

Evolution Mining

 

 

Gold Finds Technical Support As Fundamental Risks Increase

Posted on | by Leon Hinde

After reaching a high of $1370.00 in mid-April, the price of gold dropped over $200.00 and traded as low as $1160.00 on August 16th.

By many technical measures, the 4-month correction in the yellow metal looks to have run its course.

Increased trade tensions, EM currency weakness and Geo-political risks are all fundamental elements which support higher prices for Gold.

The next point of resistance is near $1214.00, with solid support at $1185.00

Our preference within the gold miners is NCM, followed by EVN.

 

Evolution Mining – Buy

Posted on | by Leon Hinde

Our Algo Engine generated a buy signal in EVN, following the recent higher low formation.

Via our “Opportunity in Review” webinars and blog commentary, we recommended an entry level at $2.65.  The stock now looks to have found support and we suggest holding the position.

Apply a stop loss an a break of the recent low.

Evolution Mining

Spot Gold Posts A Weekly Reversal Higher

Posted on | by Todd

After sliding more than $200.00 over the last four months, Spot Gold snapped a six-week losing streak to close at $1205.00.

Yesterday’s 2.0% rally was supported by the combination of a slightly lower US Dollar and a record high short positioning from retail speculators.

The technical indicators suggest Gold bulls have a bit more work to do to before a sustainable reverse in trend can be established. A NY close above resistance at $1212.00 would confirm a major low is in place.

We currently have ALGO buy signals for both NCM and EVN and both stocks are part of our ASX Top 100 portfolio.

We suggest adding to long positions in both of these names with  medium-term targets of $23.35 and $3.65, respectfully.

Newcrest Mining

Evolution Mining

 

 

EVN – Algo Update

Posted on | by Leon Hinde

Evolution Mining reported FY18 earnings in line with consensus with revenue of $1.5b, EBITDA $795m, EBIT $360 and NPAT of $250m. 

FY19 production guidance 720k-770k ounces at an expected all in cost $880oz. EVN was one of the lowest cost gold producers over FY18.

EVN declared a fully franked 2HFY18 dividend of 4c. On a full year basis into FY19, we have EVN on a 2.8% yield.

We see EVN as a buy opportunity within the $2.50 to $2.75 price range. Supported by a rebound in the oversold gold price.

 

EVN – Moving Into Our Target Retracement Zone

Posted on | by Leon Hinde

EVN has been on our watch list with a target retracement zone within the $2.50 – $2.75 range.

The share price has now traded at the upper band of our target and investors can now consider a partial allocation in EVN.

Should the stock trade down to the $2.50 – $2.60 area, it will then make it onto our high conviction list.

Evolution Mining

 

 

Buy The Dip In Evolution Mining

Posted on | by Todd

Our ALGO engine triggered a buy signal for Evolution Mining into yesterday’s ASX close at $2.92.

This “higher low” pattern is referenced to the intra-day low of $2.86 posted on June 19th.

A recent broker report suggests that EVN has several overseas mining assets on its acquisition  radar.

The report also showed that EVN’s cash balance increased over the last quarter by $115 million to $332 million, while the company’s net debt fell from $187 million to $71 million.

EVN was added to our ASX Top 100 Model portfolio on July 17th.

We see further support in the $2.80 area  and we have medium-term upside target of $3.70.

Evolution Mining

 

 

 

 

Has Spot Gold Found A Near-Term Low?

Posted on | by Todd

After reaching an intra-day high just under $1370.00 in mid-April, the price of Spot Gold has dropped over 12% and matched a 1-year low of $1210.00 last week.

The recent strength in the USD, weakness in the Yuan and uncertainty over global trade tariffs are some the reasons used to explain the slide in the yellow metal over the last 2 months.

What is clear is that the technical picture in Gold is deeply oversold and due for a material correction higher.

As illustrated in the chart below, the last 8 times that Gold fell more than $90.00 over a 3-month period, the rally that followed averaged close to $150.00, or just under 13%.

Despite the recent weakness in Spot Gold, local Gold miners have performed reasonable well and have expanded production both domestically and abroad.

Our ALGO engine is now showing buy signals for NCM, SBM, NST, OGC, SAR and EVN.  

In addition, NST, EVN and NCM are included in our ASX Top 100 model portfolio.

We currently see the $1235.00 area in Spot Gold as an inflexion point which could drive the price higher and would be a net positive for these local Gold names.

 

ALGO Buy Signal In Evolution Mining

Posted on | by Todd

Our ALGO engine triggered a buy signal on Evolution mining into yesterday’s ASX close at $3.13.

The “higher low” price pattern is referenced to the intra-day low posted at $3.07 on May 21st.

In general, the junior mining stocks have been performing well even as the price of spot gold has traded lower. We expect a turnaround in the spot price would give the mining stocks a lift.

EVN has now been added to our ASX Top 100 Model portfolio. We see good chart support at $3.00 and initial resistance near the $3.60 area.

Evolution Mining

Will US “Stagflation” Be Bullish For Gold?

Posted on | by Todd | Leave a Comment on Will US “Stagflation” Be Bullish For Gold?

One of the main policy points from Wednesday’s FOMC meeting was that the US Central bank will accept an overshoot in inflation even if overall GDP growth starts to slow……..more commonly known as Stagflation.

Stagflation is an economic condition which is characterized by higher inflation and lower GDP and employment growth, which is not bullish for equity markets and not bearish for Gold.

Over the last 6-months, Gold has been trading in a broad pennant formation bound by $1365 on the topside and supported at $1300 at the lower end of the range.

Due to recent USD strength, the yellow metal is currently trading near the bottom end of the range near $1315.

If US inflation rates continue to probe higher, we expect the USD/Gold correlation to soften. In an inflationary environment, Gold and the USD usually move higher simultaneously.

As illustrated in the charts below, the local gold mining stocks have been showing divergence with SBM, EVN and SAR near all-time highs, while NCM is trading at $21.55, almost $3.00 below its 52-week high.

Our base case is that Gold will rise over the medium-term, which should be supportive for the local mining names.

For more information on investment strategies within the Gold sector, call our office at 1-300-614-002.

Santa Barbara Mines

Saracens Mineral

Evolution

Newcrest Mining