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The Australian stock exchange had its best week in 13 months, but Newcrest’s share price didn’t quite follow suit. Despite a positive market trend, Newcrest’s shares struggled due to fresh COVID concerns in China, which impacted commodity stocks.
Last week, Newcrest’s share price increased by 3.19% after the company completed its acquisition of Pretium Resources. This deal gives Newcrest access to the Brucejack mine in Canada’s Golden Triangle region. This was the fourth consecutive week of gains for Newcrest’s share price, driven by expectations of higher gold production, increased cash flows, and a long-life, low-cost mine.
However, the recent spike in COVID infections in China led to new lockdowns, affecting commodity stocks in Australia, China’s major import partner. Consequently, Newcrest’s share price has dropped by 3.28% as of now.
The decline was marked by a failure to break through the resistance at 26.26, which was a high point from November 2021. This situation opens up the possibility of the share price falling to the immediate support level of 25.18. If this support level fails, the price could drop further to 24.01 and possibly even lower, with the next target being 22.25, although that seems distant at the moment.
On the other hand, if Newcrest’s share price breaks through the 26.26 resistance, it could pave the way for a rise to 27.05. If the price continues to rise, additional targets include 28.34 and 29.25, the latter being a high from May 2021.