IAG to rally, but then take profits.

by Michael Gable

IAG has more than doubled its share price in the last 18 months, and up until May this year it was trending very strongly. Since peaking in May, the share price has come off a bit but not in a way that suggests a larger sell-off is around the corner. After easing back over May – June, the share price attempted to go to a new high before failing. You would assume this is negative, but in IAG’s case it is not. The share price didn’t get punished for failing to go to a new high. Instead, it has managed to congest under the high, making a few more attempts at pushing through. This means that there is a good chance of it breaking to the upside, and if it does, we could see a very impulsive move develop. On the back of today’s AGM, it appears as though this breakout is now starting to occur. We anticipate an eventual rally in the order of 80c, which would see it retesting its pre-GFC high. We are more bullish on QBE fundamentally so unless you are purely trading IAG from a technical point of view, you may consider using an eventual rally as an opportunity to take profits and switch to QBE.

Disclaimer

Disclaimer: Michael Gable is an Authorised Representative (No. 376892) and Fairmont Equities is a Corporate Authorised Representative (No. 444397) of Novus Capital Limited (AFS Licence No. 238168). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.