shaw a golden opportunity is building

Shaw Stockbroking...Trading Idea: Lihir Gold (LGLKZA) – A golden opportunity is building

LGL has been sold off aggressively since peaking just shy of $4.50 in October. Last week the company revised its production guidance down to 700koz from 750koz and this saw a savage reaction from the market with the stock off ~8% last week. Technically we have had 2 falling knives out of 3… so expect the third and final down spike today before a bounce. $3.30 is the support and at this level the stock is oversold. Buy LGLKZA

Technically LGL needs to hold key support at $3.30. the stock is a good chance of testing the $3.30 level this week, and evidence of buying here would suggest a short term bounce. It is common to see a stock move down in lots of 3 black candles before a bounce… today may prove to be the final down spike.

Despite the disappointment of another production downgrade, the impact to consensus valuations is minimal as is the impact of profitability. The biggest impact of the downgrade is on sentiment, however, the stock is already off nearly $1 from its October peak and we would be happy to look at wading in on the long side at $3.30

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