New Gold (NGD) Showing Great Relative Strength To Gold
After following and investing in the gold mining sector since 2000 I have tried to identify the major leaders in each run and greatest candidates for my capital. I am looking at great relative strength to the price of gold. This indicator shows me that this miner has great leverage to the price and even if gold stays flat this miner will outperform.
On June 8th, 2010 New Gold (NGD) made a triple top breakout relative to gold and shows great relative strength. One of the reasons NGD is outperforming even though it has exposure to base metals is that the street is becoming aware of its amazing portfolio of assets, decreasing cash costs and major institutional insiders such as Pierre Lassonde and Seymour Shulich who build Franco Nevada. These are the type of investors who recognize value and growth both of which NGD has and have put capital into this company.
Today NGD was put on FTSE Gold Mines Index which is an important step in NGD's growth story as its market cap has improved significantly since our original recommendation at 2.50 last May. Precious metals are outperforming the general indexes. When I see breakouts in specific miners relative to gold this is a huge buy signal and believe NGD will move higher. NGD has the financial strength to withstand a market downturn and it seems that the investment community is becoming aware of NGD's assets and growth story.