Clouds Are Clearing For Rio Tinto Shares

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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 appear to be stabilising after their recent decline. Fairmont Equities' Michael Gable sees potential for a near-term recovery.

By Michael Gable 

With the ceasefire between the US and Iran now officially over, we risk heading back to the same headline driven volatility where we either have a day where energy stocks are up and everything is down, or vice versa.

However, so far, the market seems to have “learned” from the last outbreak in hostilities and has taken a short-cut in assuming that Trump will de-escalate for his own benefit.

This means that markets now appear to be ready to creep higher from here, even though oil prices are going to go higher.

We only need to see how well the major banks and miners are trading from here to get a sense that the Australian market wants to creep higher.

Even the S&P500 Index looks like forming an ascending triangle, which is an indication that higher levels are probably on the way from here.

So, although we saw the familiar situation last night where oil was up and everything else was down, when we zoom out and look at the big picture, we still see further upside in commodities and a broader market that is likely to get moving higher again.

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

The pullback from the June high has seen Rio Tinto become oversold on the daily RSI, which doesn’t occur very often.

Also, last week, we saw the stock gap down on Thursday and then gap back up on Friday to provide an “island reversal” (circled).

We now have a situation that resembles that of March and due to the island reversal and the buy signal on the RSI, we have a strong chance that RIO has found a low and will rally higher again.

Current levels are a buying opportunity.

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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