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Following Northern Star

Technicals | Mar 07 2017

This story features NORTHERN STAR RESOURCES LIMITED. For more info SHARE ANALYSIS: NST

By Michael Gable 

Market exuberance and irrationality seemed to be the only excuse for the US markets to stage a huge rally the day after US President Donald Trump's speech to a joint session of Congress. Their market hasn't followed through, but it also hasn't been heavily sold off – yet. Our market is still meandering sideways, being a little torn focusing on domestic news and getting swept up with the macro forces.

The prospects of a US rate rise this month sit at over 70% now, and gold has therefore eased back from its recent run. It is still holding in there though, and there could be more upside soon. We visit the chart for Northern Star Resources ((NST)) in today's report.
 

From the lows in December, NST had a brief bounce towards $4 but it found resistance at the 38.2% retracement of the July-December fall. The rally looked a little weak and vulnerable but it has since rallied again, reaching the 50% mark, and therefore showing some strength. These levels coincide with gold also reaching its 38.2% and 50% retracement levels as forecast in our gold comment on 10 January. NST (and gold) has now fallen back near that 38.2% level again and should find support. Measuring the 3-wave decline that has taken place since the February peak, we can see support around $3.94. That should provide the launchpad for the next movement higher where we place an initial target for NST near $4.80 which equates to a gold price back near US$1300. If it can clear that, then we are looking at a retest of last year's high. The prospects for NST start to look much less bullish if we see it head back to $3.80.
 

Content included in this article is not by association the view of FNArena (see our disclaimer).
 
Michael Gable is managing Director of  Fairmont Equities (www.fairmontequities.com)

Michael assists investors to achieve their goals by providing advice ranging from short term trading to longer term portfolio management, deals in all ASX listed securities and specialises in covered call writing to help long term investors protect their share portfolios and generate additional income.

Michael is RG146 Accredited and holds the following formal qualifications:

• Bachelor of Engineering, Hons. (University of Sydney) 
• Bachelor of Commerce (University of Sydney) 
• Diploma of Mortgage Lending (Finsia) 
• Diploma of Financial Services [Financial Planning] (Finsia) 
• Completion of ASX Accredited Derivatives Adviser Levels 1 & 2

Disclaimer

Michael Gable is an Authorised Representative (No. 376892) and Fairmont Equities Pty Ltd is a Corporate Authorised Representative (No. 444397) of Novus Capital Limited (AFS Licence No. 238168). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.

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For more info SHARE ANALYSIS: NST - NORTHERN STAR RESOURCES LIMITED