Labrador Iron Ore Royalty Corp. setting up a trade

Jul 20th, 2015 – Comment

If LIF does move higher the next level of resistance would come in near $16.00.


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LIF LOGO

Read your past analysis of LIF.

What are your thoughts today. It seems like there is support at $13 -14$

Thanks,

Guy

 

Hey Guy,

Thanks for the assignment. This will be the third time since October of 2014 that I scan the charts for Labrador Iron Ore Royalty Corp. (LIF TSX). The last time was on March 25, 2015 for Gordon. The shares were trading for $15.82 and offered a dividend yield of 6.35%. The title of the report revealed the outcome of the analysis that LIF still hadn’t found a bottom.

The dominate patterns included a waterfall decline, a death cross that formed in September of 2014 and resistance along the 50-day moving average. In addition the MACD and the RSI were not pointing to a trend reversal. It was advised that LIF needed to be viewed with caution.

Unfortunately that was the right call. The stock continued to sell off hitting a 52-week low of $10.81 by mid April of 2015. From there the shares caught a bounce as the MACD and the RSI generated buy signals that had knowledgable investors hitting the buy button. The stock ran to resistance at $17.00 where we now find ourselves.

A survey of the charts will serve as the basis of my analysis of LIF.

 

 

LIF

The three-year chart illustrates the established downtrend that started last summer and the death cross that warned of continued selling pressure. Worth noting is the resistance along the 200-day moving average that put a stop to the advance that started in April. The MACD and the RSI generated sell signals in May as the stock began to pullback from resistance at $17.00.

 

 

 

 

 

 

 

 

LIF2

The six-month chart provides a sharp focus on the resistance at $17.00 and the 200-day moving average. The MACD and the RSI signalled a buy as the shares became oversold at $13.00 in early July. What is currently visible is an ascending triangle which is a continuation pattern. If LIF does move higher the next level of resistance would come in near $16.00.

The current dividend yield is 7.14% but be aware of that the trend is your friend until it ends and at the moment it is still down.

Next time I will compare Sun Life Financial Inc. (SLF TSX) and Manulife Financial Corp. (MFC TSX) for Andy in Montreal.

Make it a profitable day and happy capitalism!

 

 

 

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