MIN is an $8 billion mining services company with operations across lithium and iron ore. Strong iron ore prices and renewed interest in lithium has seen its share price more than double over the last 12 months.
“Despite this impressive run, I believe that the share price has further to go and current levels are a buying opportunity,” Michael said.
“The safest time to buy a stock is after it has consolidated against its trend. That is, we don’t want to be chasing a stock that has been running hard for many days on end.
“In the case of MIN, it rallied strongly in the latter half of 2020, but from early January it failed to make any progress.
We can see on this chart below that there was a clear ceiling in the share price just above $40. By trading sideways without being pushed much lower, it was showing us that any selling pressure was met with fairly equal buying pressure. When the selling slows down, it then enables the share price to get back into an uptrend.
“This is what we have seen in the last few days (circled). The consolidation from the last few months has left us with a safer entry point here because most of the sellers are done, and naturally we should expect the buyers to now push the share price much higher,” he added.
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