Five Aussie Gold Stocks Under Swing Traders’ Lens- EVN, NST, NCM, WAF, and SAR

  • May 29, 2020 AEST
  • Team Kalkine
Five Aussie Gold Stocks Under Swing Traders’ Lens- EVN, NST, NCM, WAF, and SAR

Summary

  • The gold spot is consolidating after showing a bumper rally, which in turn, is keeping ASX-listed gold stocks under gush.
  • Furthermore, while the spot gold is consolidating and lack indication of clear direction ahead, the improved risk appetite of the market seems to be favouring gold stocks.
  • Majority of ASX-listed gold stocks have relatively outperformed the market (or S&P/ASX 200 Index) with a substantial margin and are now some of them are entering the relevant wave of a new swing.

ASX-listed gold stocks such as Evolution Mining Limited (ASX:EVN), Northern Star Resources Limited (ASX:NST), Newcrest Mining Limited (ASX:NCM), West African Resources Limited (ASX:WAF), and Saracen Mineral Holdings Limited (ASX:SAR) along with many others are picking up momentum on the exchange amid rallying gold prices, which have now reached a phase of consolidation.

To Know More, Do Read: Gush for Gold; How You Should Plan to Play The Consolidation?

In the wake of a rally in the spot gold price, the ASX-listed gold stocks have emerged as the top-most stocks delivering remarkable returns with the majority of the ASX-listed recently landing to a 52-week high and relatively outperform the return from gold and the overall market (S&P/ASX 200 Index).

 

 

To Know More, Do Read: Gold Rush And the 52-Week High Landers- WAF, EVN, and AGG

Furthermore, iron ore stocks were the only one matching tune with the ASX-listed gold stocks some of them such as Fortescue Metals Group Limited (ASX:FMG) making to the top five-list of the best performing stock on a YTD basis.

To Know More, Do Read: Top Five Metals & Mining Performers with Returns More Than ASX200

While the gold spot is under a phase of consolidation currently and till now it has rallied to a record high, the improved risk sentiment, inferred from recovering bond yields, is attracting investors towards gold stocks, which offer them an opportunity to generate alpha, and at present many gold stocks are trading with a beta lesser than 1, which is further, reflecting upon lower volatility as compared to the market.

Aussie Gold Stocks Under Momentum

  • Evolution Mining Limited (ASX:EVN)

EVN gained momentum and remained under consistent rally post reaching a low of $3.29 (16 March 2020) and reached to a new 52-week and a record high of $6.20 (intraday high on 21 May 2020), which in turn, marked a price appreciation of ~ 88.44 per cent.

In the status quo, the stock is trading at $6.06 (as on 29 May 2020, 2:27 PM AEST), slightly up against its volume weighted average price (or VWAP) of $6.04.

 

EVN Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

EVN Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

 

On the daily chart, the stock has recently tested the mean value of the 20-day simple Bollinger band and is now moving to complete the upswing; however, the major resistance for the swing is yet intact at the previous high of $6.20. Also, it should be noticed that the +1 Standard Deviation (SD) of the Bollinger band, the high of the previous candle, and the resistance line of the movement channel are all overlapping, which makes the current resistance zone decisive, and investors should monitor the level closely as above the same, the stock would mark the continuation of the upswing.

On the contrary, failure to cross the resistance would mark a failure swing, and the mean value of the Bollinger, followed by, the support line of the trend channel, horizontal psychological support line, and -1 SD would act as near-term to the major support.

  • Northern Star Resources Limited (ASX:NST)

NST is presently trading at $14.740 (as on 29 May 2020, 2:39 PM AEST), slightly up against its VWAP of $14.65. Till now, the stock has delivered a price gain of ~ 71.86 per cent from the level of $8.850 (intraday low on 16 March 2020) to the level of $15.210 (intraday high on 26 May 2020).

 

NST Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

NST Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

 

On the daily chart, the stock is currently moving to test the +1 SD of the 20-day simple Bollinger after retracing from the mean value of it. However, the 12,26,9 MACD indicator is showing a negative cross. The stock has recently completed the third wave of a swing (from 6 April 2020 to 26 May 2020) and is presently forming the first wave on a new swing with a resistance of the +1 SD and the upper line of the trend channel.

Investors should monitor the stock around the previous high as a breach above the suggested resistance would mark the first wave of the newly formed swing or else failure to do so would mark a swing failure, leading towards a price correction with support of the mean value, the lower line of the trend channel, and the -1 SD of the Bollinger band.

  • Newcrest Mining Limited (ASX:NCM)

Though as compared to peers, NCM has not delivered a bumper return; however, like seen in other charts, NCM has also witnessed the end of the previous swing and the generation of a new swing.

 

NCM Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

NCM Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

 

On the daily chart, the stock is moving up after rebounding from the mean value of the 20-simple Bollinger band and the 1/3 fraction of the Fibonacci fan, projected after connecting the recent low to the recent high.

The stock marked the completion of a swing on 26 May 2020 from 30 March 2020 and is currently marking the generation of the first wave of a swing with resistance at the previous high of $32.380 (as on 18 May 2020). Investors should monitor the stock around the resistance level as above the resistance it would mark a new swing while failure to so do would lead to a swing failure and correction with support of the mean value of the Bollinger band and the 1/3 fraction (as they are overlapping, it should be decisive support), followed by the 2/3 fraction of the fan, 3/3 fraction of the fan and -1 SD of the Bollinger.

  • West African Resources Limited (ASX:WAF)

 

WAF Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

 WAF Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

 

On the daily chart, the stock is forming a narrowing triangle, which coupled with a squeeze in the 20-day simple Bollinger band, reflecting that the stock is poised for a strong momentum, the direction of which would depend upon the ability of the stock to breach above or below the triangle.

Furthermore, the stock ended its previous swing on 8 May 2020 from 23 March 2020 and presently the third wave of the newly formed swing is in motion (started on 9 May 2020). As per the theory of swing trading, the third wave usually completes ~ 33 per cent movement of the third wave of the previous swing (max 100) before retracing back.

 

SAR Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

SAR Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

 

  • Saracen Mineral Holdings Limited (ASX:SAR)

On the daily chart, the stock is presently bouncing back from its support level of the 1/3 fraction of the Fibonacci fan and the mean value of the Bollinger band. The recent swing in the stock ended on 25 May 2020 from 20 April 2020, and at present, SAR is forming the first wave of the swing success of which would depend upon the ability of the stock to breach its previous high of $5.69 (as on 19 May 2020).

Likewise, failure to breach the previous high and complete the first wave of the swing would lead to price correction with the support of the mean value and 1/3 fraction of the Fibonacci fan (overlapping), followed by, 2/3 fraction, 3/3 fraction, and the -1 SD.

 


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