Rio Tinto Limited (ASX:RIO) Aims To Be King

Rio Tinto Limited (ASX:RIO) Aims To Be King

Rio Tinto Limited (ASX:RIO) Aims To Be King

  • It has been just over a year since Jean-Sébastien Jacques took over the reins at Rio Tinto. The 45-year-old France-born executive knows there is much more still to do to restore investor confidence in the sector.
  • Years of profligate spending and dealmaking left the industry saddled with huge debts and a reputation as a poor steward of shareholder capital.
  • Under his leadership the Anglo-Australian miner has continued to shrink its debts, declared $3.6bn of cash returns to investors and sold the bulk of its coal business. Its share price has risen almost 50 per cent during the past 12 months and, for the first time in the company’s history, there were no work-related fatalities on its sites during the year.
  • But an ambitious Mr Jacques is not satisfied. He wants Rio to be the most envied mining company in the world, just as it was in the late 1990s under the leadership of Bob Wilson and Bob Adams. The two men transformed Rio from a disparate conglomerate to a leading miner that had an unrelenting focus on shareholder returns.
  • Rio Tinto energy and minerals boss Bold Baatar plans to bring his private equity experience to running a Ventures business that will chase new minerals associated with technological disruption, with the miner prepared to buy and then sell projects to make cash.

Rio Tinto Limited (Rio Tinto) is a mining company. The Company is focused on finding, mining and processing of mineral resources. Its segments include Iron Ore, Aluminum, Copper & Diamonds, Energy & Minerals, and Other Operations. Its products include aluminum, copper, diamonds, gold, industrial minerals (borates, titanium dioxide and salt), iron ore, thermal and metallurgical coal, and uranium. The Iron Ore product group’s operations are located in the Pilbara region of Western Australia. The Company’s business includes bauxite mines, alumina refineries and a range of aluminum smelters. The Copper & Diamonds product group has managed operations in Australia, Canada, Mongolia and the United States, and non-managed operations in Chile and Indonesia. The Energy & Minerals has operations across six sectors: borates, coal, iron ore concentrate and pellets, salt, titanium dioxide and uranium.

Overall, the bias in prices is: Upwards.

Short term: Prices are moving.

Intermediate term: Prices are trending.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 62.86.

The projected upper bound is: 68.37.

The projected lower bound is: 62.98.

The projected closing price is: 65.67.

RIO TINTO FPO closed up 0.140 at 65.530. Volume was 48% below average (neutral) and Bollinger Bands were 61% wider than normal.

Open         High         Low           Close         Volume
65.230      65.770      65.220      65.530      1,253,353

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period      50-period       200-period
Close:                       64.96             62.07               60.32
Volatility:                15                    28                    34
Volume:                  1,812,480      2,384,384      2,431,541

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

RIO TINTO FPO is currently 8.6% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect moderate flows of volume into RIO.AX (mildly bullish). Our trend forecasting oscillators are currently bullish on RIO.AX and have had this outlook for the last 7 periods.

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 65.9200. This is not an overbought or oversold reading. The last signal was a sell 1 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 65.27. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 37 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 71. This is not a topping or bottoming area. The last signal was a sell 6 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 11 period(s) ago.

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John Heffernan

John Heffernan is a Junior Analyst at HEFFX. John is studying Economics and is a contributor on equities at Live Trading News.

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