IAMGold Corp. enjoying a bounce off its 52-week low

Jul 29th, 2013 – 1 Comment

At the moment it appears that there is more to come with this advance.


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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IMG LOGO

Hey Lou,

What do you think of IMG.TO? I put a few dollars into it at $5.22 and its slid since then, but it seems to be making a comeback.

Thanks,

Kevin

 

Hey Kevin,

 

Thanks for the assignment. This will be the fourth time that I examine the case for IAMGold Corp. (IMG TSX). The first study was published on April 5, 2010 when the shares were trading at $14.46. It was identified that the stock was in a downtrend and that selling pressure had taken the shares down $8.00 from their highs. The most recent analysis was conducted on June 3, 2013 on a request from Nick who had bought shares at $11.00 and then again at $8.50. The stock was trading at $5.43 and Nick wanted my thoughts on the company.

The research undertaken on his behalf just seven weeks ago indicated that there was still a downtrend in place and the the stock was meeting resistance along the 50-day moving average and at $6.00. The conclusion offered at the time was that were no indications that the stock was a buy or that a rapid recovery of  his losses could be expected. It was also noted that there is a period of seasonal strength for gold stocks that runs approximately from July to September that could offer a trading opportunity.

Retrospectively the analysis was correct as the stock retreated to its 52-week low of $4.00 on June 26, 2013 and began a recovery in July. Another run at the charts will provide greater depth to our understanding of how best to manage your investment in IMG.

 

IMG

The three-year chart offers a number of patterns worth mentioning including the gap down in November of 2012 as the market responded to selling pressure on gold itself. In addition a death cross surfaced in January of 2013 indicating that sellers were in control of the market and lower prices were in the offing.

 

 

 

 

IMG2

The MACD and the RSI on six-month chart generated sell signals in June after the last study was published. Also take notice of the resistance along the 50-day moving average through mid June as that stock continued to retreat. The momentum indicators generated buy signals in July as we entered the period of strength for gold stocks.

 

At the moment it appears that there is more to come with this advance. However you will have to monitor your investment closely to ensure that you take full advantage of this window of opportunity.

 

Make it a profitable day and happy capitalism!

 

 

 

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