NEM recently broke above its descending trend line to signal that a reversal from the earlier downtrend is in the works. However, the price hit resistance at the 0.0400 mark and is still in the middle of a correction.
Looking at the Fibonacci retracement tool shows that price is closing in on the 50% level around the 0.0370 mark. A larger retracement could test the 61.8% level that coincides with the 100 SMA dynamic inflection point, which might be the line in the sand for a pullback.
If any of the Fibs hold as support, NEM could recover to the swing high and beyond. However, the 100 SMA is below the longer-term 200 SMA on this time frame to signal that the path of least resistance is to the downside or that the selloff is more likely to gain traction than to reverse.
RSI is heading lower to confirm that sellers have enough energy to push lower, but the oscillator could approach the oversold region soon to reflect exhaustion. Stochastic is already in the oversold level to indicate that bears are tired. Turning higher could indicate that buyers are taking over and allowing the climb to resume.
NEM suffered a big selloff on rumors of bankruptcy but news of a funding solution could give it some life. Earlier on, the foundation announced restructuring and some layoffs, leading to speculations that it might shut down completely at some point.
However, the NEM Foundation clarified some rumors and released plans for a total rebuilt of its operating structure – something that could be comforting to investors after the exit of its President Lon Wong. According to their Secretariat Office, the company wants to “operate NEM Foundation from February 20, 2019 – February 20, 2020,” “implement new structure,” and “use the existing budget to clear unpaid invoices, employee contracts, miscellaneous expense and start afresh.”
Images courtesy of TradingView