Zanaga Iron Ore: ‘Golden Cross’ buy signal approaching

The past week has seen a major reshuffling of the pack in the wake of the Trump victory. But with the alleged $1trn boost to the US economy, especially on the infrastructure front, companies like Zanaga Iron Ore (LON:ZIOC) should come in from the cold.


I have to admit that a certain Monday morning feeling took hold of me today. Even though a note from Align Research on Zanaga Iron Ore hit my inbox, I was not able to take the glory of covering the shares from a technical perspective ahead of a near-50% share price rise. The logic, apart from this company being well cashed up with one of the world’s largest potential iron ore resources, is that in the wake of the Trump infrastructure initiative, the main building blocks of copper and iron ore should be in decent demand.

This view has already been reflected on the daily chart of this stock given the post March recovery of the 200 day moving average at 2.81p. Indeed, it would appear we are just a day or two away from a golden cross buy signal between the 50 and 200 day moving average. The notional target in the run up to this technical buy signal is seen as being as great as the top of an autumn 2014 rising trend at 8p. This is a good end of 2016 target. Only back below former initial 2016 4p resistance really delays the upside scenario.