Rio Tinto Shares Look Poised

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    [0] => Array
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This story features RIO TINTO LIMITED.
For more info SHARE ANALYSIS: RIO
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

Rio Tinto shares have consolidated above previous highs and Fairmont Equities' Michael Gable suggests the bias leans towards a further move higher.

By Michael Gable

By Michael Gable 

Overall price action in the market is looking fairly positive, but there are a couple of warning signs it won’t be smooth sailing from here.

In the US, the remarkable rally that took the S&P500 Index to new highs was the result of only a handful of stocks, which isn’t a great sign.

However, the Russell2000 index, which contains US small caps, is also breaking higher and trading very well.

That is a positive sign, as we would expect that to lag if market conditions were bearish.

In Australia, however, we are seeing more and more companies update the market with how they are being affected by the war in the Middle East.

Westpac and National Australia Bank have increased costs and provisions and a range of other companies are seeing their earnings being impacted.

As we have highlighted before, opening the Strait of Hormuz tomorrow will not eliminate the months of pain ahead as supply of oil will take a long time to ramp again and those desperate for that last marginal barrel of oil will almost pay anything for it.

Any dip in the oil price, as we have been saying almost every week, is an opportunity to buy.

Today, we offer a technical view on Rio Tinto ((RIO))

We looked at the Rio Tinto chart on 30 March when it was trading at $160.78.

Like with BHP, we noted it had “formed a bullish candle on the weekly chart. All of this means that RIO has found very strong support and is now ready to rally again to new highs.”

After rallying to new highs a few days later, the share price stalled.

However, we can see that instead of falling back down sharply, it has merely consolidated on top of the old high (circled) as it prepares for another move higher.

RIO is therefore a buy at current levels. Initial stops can be considered back near $160.

Content included in this article is not by association the view of FNArena (see our disclaimer).
 
Michael Gable is managing Director of  Fairmont Equities (www.fairmontequities.com)

Fairmont Equities is a share advisory firm assisting Private Clients with the professional management of their share portfolio. We are based in the Sydney CBD but provide services to private clients across Australia. We believe that the concepts of fundamental analysis and technical analysis of stocks are not mutually exclusive. Regardless of whether you are a trader or long term investor, combining both methods is crucial to success. As a result, the unique analysis of Fairmont Equities is featured regularly in the media such as Sky News Business, CNBC, The Australian Financial Review, and the ASX newsletter. Contact us for a free trial of our research and information on our portfolio management services. 

Michael is RG146 Accredited and holds the following formal qualifications:

• Bachelor of Engineering, Hons. (University of Sydney) 
• Bachelor of Commerce (University of Sydney) 
• Diploma of Mortgage Lending (Finsia) 
• Diploma of Financial Services [Financial Planning] (Finsia) 
• Completion of ASX Accredited Derivatives Adviser Levels 1 & 2

Disclaimer

Fairmont Equities Australia (ACN 615 592 802) is a holder of an Australian Financial Services License (No. 494022). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.
 

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