IGO Shares Test Resistance After Strong Close To The Week

IGO Limited (ASX: IGO) shares experienced a surge at the end of the week, testing a key resistance level amid fluctuating market sentiment. IGO shares closed the day up 7.11% at A$6.93, having tested the A$7 resistance level earlier in the session. The positive movement contributes to a year-to-date gain of 42.59%. A sustained break above A$7 could signal a bullish breakout, although the stock has faced headwinds throughout the year that may not be completely forgotten.

The company’s recent performance has been marked by significant financial adjustments. In August, IGO reported a full-year loss of A$955 million, a stark contrast to the previous year’s A$2.8 million profit. This loss was primarily attributed to a A$642 million impairment related to the closure of the Kwinana lithium hydroxide refinery, a A$115 million write-down of exploration assets, and an increased rehabilitation provision of A$58 million. Revenue also declined by 37% year-on-year, from A$841 million to A$528 million. Contributing to these challenges, the Kwinana refinery operated at only 35% of its nameplate capacity during the June quarter.

Further operational difficulties were highlighted by the suspension of the Cosmos nickel project back in January, resulting in a write-off exceeding 90% of the A$1.3 billion investment made 19 months prior. The project’s closure led to nearly 400 job losses.

Despite these setbacks, IGO has seen some positive developments. During the month of November, the share price surged 25% off the back of rising lithium prices, with markets more optimistic regarding lithium demand and the electric vehicle industry. The company also reported a 293% increase in underlying EBITDA to A$19.3 million in the first quarter of FY2026, although sales revenue declined by 17% to A$105 million.

Analyst sentiment on IGO remains divided. In June, Bell Potter Securities analyst Christopher Watt issued a sell recommendation, citing concerns over capital expenditure requirements for refining assets and suggesting better investment opportunities elsewhere. However, the recent surge in lithium prices has led some to speculate on a potential re-evaluation of the company’s prospects. A retest of the A$6.50 level on the week, and the subsequent support could be a bullish sign towards a breakout, yet there remains a long way to go if IGO is to return to previous heights.