Today, we are going to highlight Lundin Gold Inc (LUG.TO) in our Daily Stock Report. This is the first time we are highlighting Lundin Gold in our daily commentaries. In the Spring of last year, the shares were just entering the favored green zone of many of the reports it was found in on the SIA Platform, including the SIA S&P/TSX Composite Index. The SIA Platform issued a Green favored Zone signal back on April 1, 2024, at a price of $19.45. In a little over a year, the shares have continued to strengthen further as the closing price is now at $48.85 which represents an astounding 151% increase since the April 1, 2024, closing price and does not include the 3.52% dividend yield the shares pay out. Currently the shares reside in the #3 spot of the favored zone of the SIA S&P/TSX Composite Index report.
The SIA platform recognized many Precious Metals stocks also picked up on this positive money flow back in the spring of last year as Agnico Eagle Mines, which we highlighted a few weeks ago, also triggered a favored rating around the same time. This underscores the value of staying in investments in the green favored zone and reinforces SIA’s methodology of identifying and remaining with those opportunities which exhibit strong relative strength, instead of market participation on the emotional attachment to a name.
In looking at the candlestick chart we see the shares were in a long sideways consolidation pattern from May of 2023, to March of 2024, between $14.00 at the bottom to $18.00 at the top of this trading range. Then in April of last year, the shares broke above this sideways pattern and a strong and steady uptrend has materialized which is still intact today. A short sideways consolidation did materialize from October of 2024 to January of this year at the $30 to $34 range to digest its strong move when it broke above $19.00 in April of last year.
Then the uptrend re-asserted itself early this year to march onto new all-time highs. With such a strong move, it may be reasonable to consider another pause may be forthcoming in order for the shares to digest their gains once again. Only time will tell if this does materialize or if the shares will continue to forge higher with the price of gold bullion also making fresh all time highs. Based on a measured move from the very brief April 3rd to April 7th pullback resistance may be found at the $50.00 level. Support can be found at the $41.75 level when the shares found a floor early April.
Let’s dive in and see what the Point and Figure Chart looks like today. Point and figure charting excels in trend identification by offering a clear view of price movements and trend reversals. With SIA Report overlay on the SIA S&P/TSX Composite index report plotted we see the shares entered the green zone in April at $19.45. A very strong and steady uptrend has ensued with only the occasional pullback along the way, but the trend remained intact. Since February, a very orderly pattern of higher highs and higher lows has emerged. Most recently, we see the shares just broke above the $45.42 level and a new high being established. Next resistance is at 50.15, which coincides with a psychological round number then above that, $52.17. To the downside, support is at its 3 box reversal of $44.53, and below that $41.14. With a SMAX score of 10 out of 10, LUG.TO is exhibiting strong near term strength against the asset classes and is exhibiting a bullish Double top pattern. Lundin Gold, headquartered in Vancouver, Canada, owns the Fruta del Norte gold mine in southeast Ecuador. Fruta del Norte is among the highest-grade operating gold mines in the world.
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