IG Group share price soars to all-time high — But Is It overbought?

IG Group share price has gone parabolic and hit its all-time high after the company published strong financial results and boosted its forward guidance. It soared to a record high of 1,717p, becoming the best performing company in the FTSE 100 Index. It has jumped by over 53% this year, beating the FTSE 100 Index, which rose by 18%.

IG Group share price pops as business continues to fire on all cylinders 

IG Group, a company that offers a popular forex and CFD trading platform, continued its strong momentum this year, helped by the ongoing volume. It has also benefited from its tastytrade, a company that offers an options trading platform.

In a statement, the company said that its revenue jumped by 19% in the first quarter to £331 million. Its reported total revenue rose by 21% to £339.9 million.

The results also showed that its total assets under management jumped to over £20 billion, helped by its expansion to the United States, where it has become a major player in the options trading industry.

Most notably, the company boosted its forward guidance, with total organic revenue rising by between 10% and 15% of the £1.1 billion base. This guidance was better than it provided a few months ago. It now expects that its revenue will continue growing by about 10% in the next few years.

IG Group is now making most of its money in the OTC derivatives business, which made £250.6 million. It was followed by its exchange-traded derivatives, stock trading, investments, and spot cryptocurrencies. Its net interest income dropped as interest rates dropped.

Meanwhile, the company continued to add customers to its platform. It ended the quarter from its monthly active customers rose to 834k from 276k in the same period last year. Its first trades jumped by 119% to 61k. The CEO said:

“Disciplined execution of our strategy, a broader product offering and favourable trading conditions have driven organic revenue growth and a fifth consecutive quarter of sequential growth in active customers.”

IG Group stock price technical analysis 

IG stock price chart | Source: TradingView 

The weekly timeframe chart shows that the IG share price has been in a strong uptrend in the past few months and is now in a record high.

A closer look shows that the Relative Strength Index (RSI) has jumped to a record high of 82.75, making it the most overbought it has been on record.

The stock has remained much higher than all moving averages. For example, its 100-week moving average stands at 1,145p, much lower than the current 1,700p.

Therefore, the stock may go through mean reversion, a situation where an asset moves back to the historical averages. This retreat may happen as investors start booking profits.

The alternative scenario is where the stock continues rising, potentially to the key resistance level at 2,000p.