IAG Gold Breakout Looming

As the market rally continues, several covered stocks enjoy making new 52 week highs or are close to their highs. I Am Gold (IAG) has bounced back from a lower support area around the $3.65 mark and currently sits right above the $5 price level. IAG’s share price has since pulled back to the $5 price level after it reached my calculated target zone of $5.50 – $6 last week.

But what sort of price action appears to be on the horizon for IAG? Is an IAG gold breakout looming? Let’s start by reviewing its longer-term charts to establish its long-term trend.

I Am Gold (IAG)

This first chart is a 5 year monthly candlestick chart for I Am Gold (IAG). A monthly candlestick chart will give an indication to IAG’s overall trend at the current time.

The MACD Histogram on a monthly candlestick chart represents long-term buying momentum. It seems very bullish that IAG’s buying momentum is starting to increase again as its share price makes its way towards its overhead resistance area from the Bearish Engulfing candlestick pattern.

Combine the increase in buying momentum from the MACD Histogram along with an increase in actual buying volume and the result should be[s2If !current_user_can(access_s2member_level1)]……

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Longer-Term Price Targets

Based on these bullish volume indicators, I calculated some longer-term upside price targets. To calculate the price target range, I used a Fibonacci Retracement Tool (the black tool on the above chart) and a Fibonacci Extension Tool (the blue tool on the above chart).

Price Targets – Fibonacci Retracement Tool

The black Fibonacci Retracement Tool was placed on IAG’s entire previous downtrend. Since all downtrends correct just like uptrends, I was looking for a minimum 38.2% retracement of its downtrend. That is what I would consider the “minimum” long-term upside price target. That price target is the $7.18 calculation.

Price Targets – Fibonacci Extension Tool

The blue Fibonacci Extension Tool was placed on what I believe is a Wave 1 & 2 in a larger Bullish Impulse wave pattern. IAG would currently be in beginning stages of Wave 3 in this wave pattern. The 100% Target Line from the blue Fibonacci Extension Tool calculated the $7.88 price level.

Purchasing shares near the beginning stages of Wave 3 in a Bullish Impulse wave pattern is a very profitable place to purchase shares for quick, substantial gains.

Price Targets Summary

So while the $7.18 – $7.78 price target may be what we are aiming for initially, I really have my sights set on the $10 range based on the above. The $7.18 – $7.88 price range may provide an area to try and flip some shares. Only time will tell but I’ve purchased my shares to find out.

While the 100% Target Line is a safer play to calculate price targets with when using Fibonacci Extension Tools, I tend to gravitate towards the golden ratio or the 161.8% Target Line.

The blue 161.8% Target Line is IAG’s Golden Ratio for its longer-term uptrend. The blue 161.8% Target Line calculates into a $10.79 price target. That price target is almost double todays share price. The 161.8% Target Line also sits right on top of the black 61.8% Retracement Line. I like when the different tools line up like that.

IAG – P&F Chart

This last chart is a P&F Chart to see what sort of price targets are reflected on it. The price targets for both the “high/low” and the “closing” P&F Charts are the same. Both P&F Charts reflect a bullish price objective of $7.75.

The bullish price objective of $7.75 falls right in line with the longer-term price targets I calculated above using the Fibonacci tools.

I Am Gold (IAG) – Summary

So is an IAG gold breakout looming in the near future? Longer-term momentum indicators seems to be in its favor and my calculated price targets are in alignment with the P&F Charts.

I would use any market weakness to buy any dips around the $5 price area all the way back down towards the $4.50 price level if the market decides it wants to take its share price back down to those levels.

Once IAG’s share price closes above the resistance area from the Bearish Engulfing candlestick pattern, the race is on! It does appear that there is an IAG gold breakout looming. Probable price objectives for the looming breakout are the 100% and the 161.8% Target Lines from the Fibonacci Extension Tool placed on the above monthly chart.

If you are interested in more of IAG’s shorter-term moves, drop a request below or in the Idea Chamber and I will post some additional shorter-term content.

Good luck trading!

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