To follow up on a previous post where I compared this current negative revision to operations in Iamgold to a similar situation at Aurizon Mines last fall 2012.  Aurizon after the bad news outlook gapped down hard and fell for 7 consecutive trading days, made a temporary 'bottom" and then rallied up 9.6% over next 3 days from that level before proceeding the next leg down and made a lower low.

 

Compare to Iamgold where it gapped down hard after the news and also declined for 7 consecutive trading days, making what I will deem to be a "temporary" bottom at C$7.95.  It has also rallied over the next 3 days after establishing this bottom up about 9.8% at the peak of  C$8.73.  Today is the dead cat bounce high and also is the 3rd day.  So far the comparison is uncanny similar to the response from investors in a related situation.  If the analogy is to continue with the two stocks then Iamgold will decline a further 14% from the first temporary bottom at C$7.95 which would imply a final bottom of around $6.85-6.90 over the course of one month.

 

For Aurizon, the numbers were C$4.58 before bad news, C$4.08 close after the news, C$3.66 first bottom after one week, C$4.01 3-day rally, and final bottom of C$3.15.  Stock got saved by a hostile bid at opportunistic price of C$4.65 that is subject to bagholder vote otherwise still would be trading at C$3.30's.