DailyPlay – Opening Trade (NEM) – February 7, 2025

NEM Bullish Opening Trade Signal

Investment Rationale

Newmont Corporation (NEM) recently broke out above its trading range with strong momentum, outperforming the S&P 500 and presenting an opportunity for further upside toward its $56 target. From a fundamental perspective, NEM is considered moderately undervalued, trading at a price-to-sales ratio of 11.40x, compared to the industry average of 12.45x. Despite this discount, NEM is growing faster than its industry, with expected EPS growth of 38.17% versus the industry average of 22.12%, and expected revenue growth of 17.34% compared to 7.45% for the industry. While net margins currently stand at -7.14%, below the industry average of 11.17%, they have been recovering, reaching 20% over the last quarter, reinforcing NEM’s substantial upside potential. Be aware that there is an earnings call on Feb 20, 2025 which is prior to the expiration of your trade.

NEM – Daily

Trade Details

Strategy Details

Strategy: Long Call

Direction: Bullish Call

Details: Buy to Open 5 Contracts NEM Feb 28 $42 Calls @ $3.85 Debit per Contract.

Total Risk: This trade has a max risk of $1,925 (5 Contracts x $385) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $385 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue higher off recent support.

1M/6M Trends: Bullish/Neutral

Relative Strength: 5/10

OptionsPlay Score: 83

Stop Loss: @ $1.93 (50% loss of premium)

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Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Thursday ‘s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

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