How about another look at LIF?
Thanks for the assignment. This will be the fourth time since 2014 that I inspect the situation at Labrador Iron Ore Royalty Corp. (LIF TSX). The last was on July 20, 2015 when the shares were trading for $14.01 and the dividend yield was 7.14%. Guy had read my earlier analysis and was wondering if LIF offered a good entry point.
The research indicated that there was an established downtrend and a death cross that formed in September of 2014. It was also noted that there was resistance along the 200-day moving average. It was advised that LIF was setting up a trade but to watch for resistance near $16.00. It was also mentioned that the established downtrend had to be respected.
Retrospectively that was the right call as the stock hit resistance at $16.00 then made its way to a 52-week low of $6.85 in January of 2016.
Another probe of the charts will inform my opinion on LIF.
The three-year chart illustrates the brutal retreat from resistance at $16.00 in November of 2015 to the 52-week low in January of 2016. The buy signals generated by the MACD and the RSI as the shares were oversold in January set up a very profitable trade for the astute investor. In addition the momentum indicators produced sell signals in April of this year as LIF once again failed to break above $16.00.
The six-month chart pulls focus on the buy and sell signals previously mentioned and support coming near $11.50. There is scant evidence that we can expect a new up leg in the near term.
The dividend yield is currently 8.7% but I would not want to chase the yield until the stock proves it can get through $16.00. Having said that keep an eye out for signs for profitable trades on the up and the down side.
Next time I will examine a number of ETF’s for Roger.
Make it a profitable day and happy capitalism!