Stock: RIO Tinto Limited (RIO ASX)
In the 12 months from early 2016 to early 2017 shares in Australian mining heavyweight RIO Tinto Limited (RIO) effectively doubled, running up from the lows of $36.53 to touch $70.00. Not a bad 12-month return for the many Aussie investors who hold the stock either directly or indirectly via superannuation. The pullback off the first test of $70.00 saw the stock retreat to test $56.50 to the downside before the buyers stepped in to run it back up for the second test of the $70.00 level. A brief & shallow retreat off $70.00 this time saw price hold firm above $65.00 before breaking up through $70.00 to tickle $75.00. From here the same see-sawing pattern higher has continued with $82.70 acting as near-term resistance and further gains to the upside now capped by the $87.00 level. Focusing on the recent rotation that has begun off the $87.00 level, we can see that $82.70 has been taken out and a move down into the key support zone between $70.00 & $75.00 looks imminent with the $70.00 acting as the line in the sand for the uptrend to stay intact.
What Does RIO Tinto Limited Do?
Sitting firmly inside the top 20 stocks by Market Capitalisation (size) on the ASX, RIO Tinto Ltd (RIO) is the Aussie mining heavyweight with operations spanning the globe. Having listed in April of 1970, the companies portfolio of products covers Aluminium, Copper & Diamonds, Energy & Minerals, and Iron Ore. The company pays a fully franked dividend that in recent times has seen payouts between $2.50-$4.50 per year.
To access a list of company announcements, financial summary & dividend history – Click Here.
The Baron’s Brief – Official Summary
Mining companies are cyclical beasts that are subject to the ups & downs of the supply & demand metrics for the products that they produce. They are also exposed to external influencing factors such as currency movements, weather events & environmental impact. External factors aside, in taking a look at the chart of RIO Tinto Ltd (RIO) we can see that the stock is in a structural uptrend, displaying the see-sawing movement higher that The Baron loves to see, with previous resistance levels becoming new support as it grinds it’s way higher.
Having rotated off the $87.00 high and back below the $82.70 level, a short-term move further south looks imminent. The Baron is targeting levels in the key support zone between $70.00 & $75.00 in anticipation of a signal that the buyers are stepping back in to resume the next push north.
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Disclaimer: The information contained in this article has been prepared solely for the entertainment & educational purposes of the reader and does NOT constitute financial or investment advice. Any examples presented in this article are for illustration purposes only. No person, persons or organisation are authorised or permitted by the authors to take any action on the reliance of this information without first consulting an authorised, accredited financial planner or advisor. The authors are entitled, at their sole discretion, to hold positions in the above-mentioned stock/s. The authors accept no responsibility for the accuracy, completeness or timeliness of the information contained in this article. Disclosure – No positions are currently held in RIO – ASX at the time of publishing this article (This is a disclosure and NOT A RECOMMENDATION).