OXR - Sliding Further Downhill

[lazyhaggis]

The OXR share price is approaching a critical longer term support level at 80 cents. Currently the stock is in downtrend and has been for about 6 months. Factors which will dictate whether OXR is likely to base around these levels or continue downwards for several more months tend to suggest that OXR will fall further. Selling volume is on the increase, gold is in a short-term downtrend at the moment (as is copper) and the upcoming US elections is also negative for gold. All in all, OXR which is actually overvalued at the moment, looks much more likely to fall further in price over the coming few months, along with many other metal stocks.

This is not bad news by any means, as lower entry prices in upcoming quality stocks will be a benefit to many investors sitting on the sidelines assessing the outcome of the pending US elections and global geopolitical events. OXR has also presented traders with some excellent profits over the past 3 years, so all up, a falling OXR price is in fact good news for both shorter term traders and longer term investors. As everyone knows, the world is heading into troubled times with various types of conflicts and troubles looming on the immediate horizon. This is all bad news for humanity, but good news for gold, copper and other metals, and of course, good news eventually for the OXR share price, but not for several more months yet.

The immediate downside for the OXR share price is about the mid 70's next week, but within a month or two, the OXR share price is likely to fall into the 60's from current levels. Depending upon how geopolitical events shape up over the next few months (namely the US elections and terrorist acts) will naturally dictate how gold performs. At the moment, gold, copper and nickel prices are much more likely to fall, and so there is the very real possibility that the OXR share price may in fact fall close to the 50's before a significant turnaround occurs. This would be excellent news for everyone, both traders and investors alike.

It all sounds a bit like Rock n' Roll, but for the sake of some sound future profits, let's keep our fingers crossed for the 50's, but the 60's or 70's would be pretty cool too. How low do other posters think the OXR share price will fall to before Christmas. It will be interesting looking back in a years time. I'm thinking about 65 cents within 2 or 3 months, but I wouldn't be surprised at all if OXR hits 59 cents by October, especially if the geopolitical scene remains reasonably peaceful. After that, well, hubble bubble toil and trouble, and a happier OXR.

Have a great weekend everyone.

Lazy Haggis,
The Mumbo Jumbo Filter.

[lazyhaggis]

OXR will also be dragged down by the tide. I've posted on this matter before, but it's now becoming more and more evident. Forget nuclear war and all that jazz for the time being, especially if that creates artificial peace of mind for some people. Look at global stock markets and their outlook for the coming year or two. There's more and more talk of economic downturns hitting the USA, Europe and Asia, including China, which will put severe downwards pressure on nickel and copper stocks. There's also alternatives to stainless steel (and more being developed) if the nickel price becomes excessive, not that nickel will affect OXR too much, but it's all part of the tide that's going to drag OXR further down.

The real tide in the short term is probably better called a severe rip, and it's going to affect nearly all stocks, especially those that are currently overvalued like OXR, and stocks that many investors are already holding significant profits on paper, again like OXR. This is a double whammy for OXR and will cause it's share price to slump at a greater rate when the rip hits home, regardless of it's possible bright future. Present day reality always hits home harder than future make believe.

So what's the tide and the rip I'm talking about. Believe me, it's significant, it's obvious, the safety flags are being withdrawn, and funds are rapidly moving out. This weekend, or as soon as possible, take a long hard serious look at three indices. The Dow Jones, The S&P 500, and the Nasdaq. All three are topping out, heading into downtrend, and on increasing volume. That spells trouble for global stock markets, including the resource sectors, and especially for overvalued stocks like OXR.

Lazy Haggis,
The Mumbo Jumbo Filter.

[donnie]

this from bloomberg. interest should be good if it happens

Newcrest, Oxiana May Be Takeover Targets as Gold Output Drops
July 26 (Bloomberg) --

Newcrest Mining Ltd., Australia's biggest gold producer, and Oxiana Ltd. may get takeover offers as gold companies worldwide combine to shore up reserves.

``We've had an increase in approaches by the investment banking community in the last few months,'' said Owen Hegarty, 54 and chief executive officer of Melbourne-based Oxiana, Australia's second-largest gold miner by market value, in an interview. ``That makes me think there is more consolidation to come.''

Money spent or bid on mergers or acquisitions in the gold industry rose 70 percent to $7.3 billion this year from the year- ago period, data compiled by Bloomberg show. Global spending on metals exploration slumped to a 10-year low in 2002, increasing the appeal of acquisitions as a means to expand.

Newmont Mining Corp. and Barrick Gold Corp., the world's No. 1 and No. 3 gold producers, are among potential buyers, said Gary Armor, a fund manager at AMP Capital Investors in Sydney.

``In order to keep growing they need to make acquisitions, just because they can't find enough gold in the ground,'' said Armor, who helps manage A$4 billion ($2.85 billion), including Newcrest stocks. ``I'd expect consolidation to continue.''

Acquisitions may be discussed when Newmont, Newcrest and other miners meet investors and analysts at the annual Diggers and Dealers conference in Kalgoorlie, Western Australia, starting today. The conference ends Wednesday.

Newcrest, which has a market value of A$4.7 billion, isn't planning any acquisitions, said Peter Reeve, general manager for corporate affairs. He declined to comment on speculation that Newcrest may receive an offer.

Gold Production

World gold production rose just 0.5 percent in 2003 and may fall 0.3 percent this year, the Australian Bureau of Agricultural and Resource Economics estimated in a March report.

Denver-based Newmont more than tripled its cash holdings to $1.3 billion in 2003. To maintain gold reserves, Newmont needs to replace production of more than 7.2 million ounces a year by exploration or acquisition, company figures show.

Toronto-based Barrick plans to spend $2 billion on four gold mines in South America and to boost production by 2 million ounces a year to 7 million by 2007. Barrick needs to replace 5.5 million ounces a year.

The company rejected a Mongolian project on July 13 because it said the deposit didn't contain enough gold.

Newcrest, based in Melbourne, has gold reserves of 28 million ounces, the company said in May. It may double production in the next three months through its A$1.2 billion Telfer mine in Western Australia.

``Newcrest will become more takeover-prospective when Telfer starts production,'' said Misha Collins, who helps manage A$8 billion at Sydney-based BT Financial Group, including Newcrest stock.

Stocks Soar

Newcrest's Ridgeway mine in New South Wales state has the world's second-lowest production costs, according to World Gold magazine, published by the London-based World Gold Council.

Newcrest's earnings will triple next fiscal year to A$337 million, JP Morgan Chase & Co. estimated in a May 13 report.

Oxiana, valued at A$962 million, is also an attractive acquisition, AMP's Armor said. Earnings may more than triple to A$70 million next fiscal year, according to Shaun Giacomo, a Sydney-based analyst at UBS AG, Europe's biggest bank.

Still, rising stock prices may deter potential buyers. Newcrest shares have gained 79 percent in the past year and Oxiana's are up 39 percent.

`Bigger Is Better'

A potential bidder for Newcrest could pay as much as A$26.50 a share, Melbourne-based Goldman Sachs JBWere Pty. said in a report last month. That's 86 percent above Friday's closing price and would value the company at A$8.7 billion.

``At A$26, you are starting to draw pretty significant amounts of money,'' Giacomo said. ``Newcrest looks attractive because of cash