After last week’s candlestick closed, NEM had moved within a $0.10 range. Its highs of $0.24 had breached above the 20 period MA and after its close, USD bull pressure was confirmed. Right now, there is a stochastic buy signal turning from the oversold territory. If price action manages to stay above this week’s lows of $0.14 lows, then it will complete a 3-bar candlestick formation simply known as Morning Star. Most importantly, that will be happening at oversold regions of the stochastics and most likely at the 38.2% Fibonacci retracement levels.
In the daily chart, you notice that the November 4 lows of $0.15 is an important support line and this coincides with the 38.2% Fibonacci level of the weekly chart. That is where NEM rejected lower prices and turned higher. November 4 lows was printed a few days after NEM price action showed an under-valuation closing below the lower BB. That reversal up to the main support line at $0.20 also completed double bottoms with September 15 lows as seen in the chart.
All in all, the bear break out trading strategy projected after that strong bearish candlestick on October 31 anchors on the ability of NEM price action to reverse from around the $0.20 resistance-now-support level. Any push and close above the 20 period MA towards the main resistance trend line at $0.23 means we nullification of this bear projection and go long just like in the weekly chart where a buy signal has been printed.
Our strategy in the 4HR is to follow the bullish break out strategy and to be on the right side of the trend as the chart points to. Since we are on the second phase of a minor break out strategy in the 4HR chart after retest on November 12, NEM prices are trending higher following a wave of bull pressure. NEM bulls should enter long and aim at $0.22 and $0.24 minor resistance levels with stop losses below $0.18 now that price action has broken above the middle BB at $0.19.