Stock to Sell #4 – Newmont Mining (NEM)
Newmont Mining (NEM) is one of the largest gold and copper producers in the world. It was on our list of Stocks to Sell in April, when I said: “A recent recovery rally from its March low of $38.50 appears to be stalling at its 50-day moving average, now at $42.10. Buying volume is declining, and so the stock doesn’t appear to have enough momentum to complete a reversal up.”
As expected, the recovery failed and the stock plunged to $30.30. In late May, Zacks downgraded NEM to “underperform” and ranks it a “strong sell” because of lower Q1 earnings and sales due to increasing mining costs and lower ore grades.
A recent rally with a positive MACD seems doomed to fail at its 50-day moving average line at $35.14. It is in a pronounced bear market with fragile support at its recent low at $30.30. Sell NEM at the market or sell it short with a price objective in the mid-$20s.