IAMBEINGSOLD

Apr 5th, 2010 – Comment

The breach of support along the 200 day moving average is also a signal that should not be ignored as it certainly lifts the threat level.


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iamgold

 

Hi Lou,

I just read your article on Gammon Gold. Is it safe to say that
Iamgold is in the same boat as Gammon, and headed in the same direction?
The last three months have not been kind to IAMGOLD.

Thanks,
Sonia

 

Hi Sonia,

Good eye on IAMGOLD (IMG TSX). It is following a similar path as Gammon Gold in that good news and future prospects are being washed out by selling pressure.

 

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IMG told us on February 17, 2009 that they expected to increase gold production to between 940,000-1,000,000 ounces in 2010  from 939,000,000 in 2009. But as you can see on the chart it didn’t do a thing for the stock. IMG has been selling off from the December 2009 highs and nothing has been able to slow down the selling pressure.

The uptrend from the October 2008 lows has been spectacular but the advance is broken and the question is when we can expect a reversal of the downtrend?

 

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The six month chart is not providing much in the way of patterns suggesting a return to the upside. The stock is meeting resistance along its trend line and the 50 day moving average everytime it tries to move higher. Lower highs and lower lows is not a buy signal.

There was a $0.96 lift on Friday as IMG clawed its way back to support at $14.00. but couldn’t get above resistance at $14.50. There is further resistance at $15.00. The chart also indicates that a death cross is forming. The breach of support along the 200 day moving average is also a signal that should not be ignored as it certainly lifts the threat level.

IMG has given up close to $8.00 in value since December 2009 and nothing in the charts is suggesting that the selling has been exhausted. The key is to confirm the bottom not to anticipate it. Right now it looks like IMG is trading  in a down channel which can still generate profits for those investors who know how to capture the opportunity.

Happy Capitalism!

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