spot check team, page-96

Yes SG, when I saw momentarily the Stochastic dip to under 3 and the RSI to under 24, scary moment, I knew I had to go heavy near 22.14. You could feel the tug of war between fear and opportunity. Then the strength of opportunity prevailed and she started adding cent by cent in late afternoon. Off-loaded half for a quick profit at $22.40. Today’s weakness to $22.09 was reminiscent of the feeling back on 9th May when NCM opened with a huge gap down and remained weak all day on fear that gold was going to completely collapse overnight. I still think we are right in the zone for a 5-8% bounce.

There are three outcomes once a bounce occurs here: 1. NCM is still actually on an uptrend and this was a deep 26% retrace from the $29.97 high (kind of similar to the GFC retrace I mention in my recent post). That is, there is every chance the July low of 20.89 stands and we just continue back to $30 from here. 2. The deep retrace theory of (1) above is being made complicated by a potential double bottom that can also form as our proximity to July’s low is now becoming close and within 3% (needing a fall under $21.51). (3) as you mentioned in one of your posts, it may be that we are going to see new 12 month lows, in which case July’s $20.89 is broken and we head down to close a chart gap left on 29th October 2008, between $18.18 and $18.55.

Let’s now apply time and see.

PS. Don’t get involved with NCM unless there is blood on the streets and it has fallen to match previous fall sizes where bounces have occurred. Or unless when a substantial trend changing, total capitulation has occurred (30-44 % fall) and the trend is clearly up from down (as in late July 2012). Better still, don’t buy NCM at all. It is a very volatile and dangerous stock for your capital. This is my opinion only.

Happy festive season to all and wish you all make money and lots of it in 2013.