In our “HOT” stock article today, Michael Gable, Managing Director of Fairmont Equities, explains that it’s becoming evident that IGO Limited (IGO) could be forming a low when we look at its share price chart, which he says is a buy signal.
IGO is predominantly involved in nickel and lithium mining.
“Due to these commodity prices falling dramatically in the past couple of years, so has the share price of IGO,” Michael said.
“It’s a stock where many have tried to pick the bottom, only to end up being burnt.
“However, although IGO was in a long-term downtrend, it’s now becoming evident that it could be forming a low when we look at the share price chart.
“Price action in the past several weeks has seen it retest the March high on a few occasions. “This meant that was forming an “inverse head and shoulders”.
“This pattern can indicate the low point in a stock.
“A breakout above the line near $4.40 was confirmation that this was the case (circled). “Because we now have that breakout, we therefore have a buy signal.
“IGO is therefore a buy here.
“Initial stop losses can be placed just under $4.40,” Michael said.