Iamgold Worth Watching For Possible Base

• Paul Whitfield
• On 6:06 pm EDT, Thursday October 29, 2009

Many investors who use charts have two watch lists.

There's the varsity, a collection of stocks that are near buy points. Then there's the B team, the charts that need more work.

In a market correction, the B team becomes more interesting. You don't buy stocks during a market correction anyhow, so there's no urgency.

By the time the market flashes a follow-through day -- confirming a new uptrend is under way -- the B-team charts may be ready to move up to the varsity.

Gold miner Iamgold (NYSE:IAG - News) might be such a candidate.

In early September, it cleared a three-weeks-tight pattern and quickly rose about 27%.

Then it fell about 20%. It rose smartly and then fell again. The second low undercut the first low.

It's had only one day's action since making that second low. So it's way too early to draw conclusions. But if it continues to rise, it could etch the right side of a double-bottom base.

It's worth watching, but there's no way to know if that will happen.

The potential buy point 15uld be the middle peak plus 10 cents, or 15.30.

So far, the base has shown a bit more accumulation than distribution.

Buzz up!