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Considering NXG accounts for nearly 50% of my portfolio (risky, I know, that's not the point), and the fact that NXG has slid nearly 25% since last week, I need to re-examine the market sentiment on the stock.

The fundamentals of the company are solid. This is one of the most efficient mining companies (their net cost for an oz. of gold is going to be negative given the high value of copper). It is primarily a gold and copper play, both which have been in the midst of a huge bull market (until this week). I've discussed their financial upside in previous posts, so I'll focus mostly on where NXG may slide. Note that I am a completely idiot when it comes to most things, so this is probably wrong.

Earlier today on the NXG stock message boards (which are mostly filled with stock pumpers, but there are still a few legitimate posters who offer valuable insight), somebody asked how low the slide would go. Here was my analysis on the chart (I had actually looked at the chart the night before):

Last night, the Bollinger Band (the two green lines on the main chart) showed a low of $3.44. That price point was hit today, which just goes to show you that the bears are winning right now against the bulls. More interestingly, we're seeing that the closing hours of every trading day is showing a lot of sell-off ... the "buy the dip" bulls may not be enough to stop the sell-offs. I "bought the dip" when NXG hit $4.33 last week, and I'm hurting from that.

So, assuming that market sentiment continues to be sour and the sell-off in the overheated miners, we can assume that the bears are going to do their best to test the support limits. Tomorrow will be a test down to $3.34 (the lower level of the BB), and I'm sure they're going to want to continue test down to the 50 dma at $3.17.

I'm reluctant to stop-loss NXG at this time because of all the research I've done on companies, I really like NXG the best. The only question mark is whether they can transition away from their primary mine, Kemess South. That mine is set to close in late 2008, while KNorth and their new Young-Davidson mine aren't set to open until a little after that.

At this point, I'm willing to tolerate a loss on NXG until the 50 dma at $3.17. If it gets lower than that, I'm going to have to reconsider holding NXG. Lucky for me, in today's market, there is almost no strength being shown in any particular industry, so I wouldn't be able to play the money better anywhere else.

So where's the upside? There's gonna be a significant overhang until we hit about $4-$5. There's also going to be significant overhang in the mid-$4 range as the future buyers (momo traders) engage in profit-taking :/. We may not see $5 until next quarter's earnings (July). Boo.

Following up on yesterday's post, the Nas and S&P continue to break downwards out of the trading channel ... the stochastics for the Nas show that both the fast and slow lines are indicating vast overselling. The big question is where do people finally step in and start buying?

I know I have a huge overhang on NXG and probably won't be able to even think about unloading it (good thing I wasn't planning on selling it for at least a year to get out of the cap gains tax), but it would still be nice if I had the option of unloading it.

This is the problem with investing with less than .. say $20K-$30K. It's really hard for me to lock in gains when I'm paying $20/trade.

I need some more capital.