Gold prices have gotten shellacked in 2013, but they still haven't fallen as far as shares of the firms that mine the yellow metal. Newmont Mining (NEM) is a good example of the trajectory that mining firms have seen year-to-date: Shares have shed 31% over that time period. And the chart doesn't point to an end -- at least not yet.
You don't need to be an expert technical analyst to figure out what's going on in shares of NEM. This stock has been in a well-defined downtrend since last year, hitting its head on the same resistance level five times now on the way down. The most recent attempt higher came late last week, only to get smacked back down yesterday. With shares bouncing off support, the high probability trade is to bet against NEM for a move back down the channel.Shorting gold and gold miners has been a lucrative strategy so far this year. If you're looking to enter a short position with NEM, consider keeping a stop just above its most recent swing high at $33.22. That price marks the upper bound of Newmont's downtrend. To see this week's trades in action, check out the Technical Setups for the Week portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore.
Twitter and become a fan on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV