Rio Tinto Limited (ASX:RIO) Charged With Fraud

Rio Tinto Limited (ASX:RIO) Charged With Fraud

Rio Tinto Limited (ASX:RIO) Charged With Fraud

  • Anglo-Australian mining giant Rio Tinto has been charged with fraud in the US and fined £27.4m in the UK after being accused of overstating the value of African coal assets.
  • The FTSE 100 company and two of its top former executives were charged in the US of hiding losses by inflating the value of assets in Mozambique, which Rio bought in 2011 for $3.7bn ($2.8bn) and sold a few years later for $50m.
  • America’s financial regulator, the Securities and and Exchange Commission, filed a complaint in federal court in Manhattan. It alleges that Rio Tinto, its former chief executive, Tom Albanese, and its former chief financial officer, Guy Elliott, failed to follow accounting standards and company policies to accurately value and record its assets.
  • As the project began to suffer setbacks, resulting in the rapid decline of the value of the coal assets, Albanese and Elliott sought to hide or delay disclosure of the nature and extent of the adverse developments from Rio Tinto’s board of directors, auditors, and investors, the SEC alleges.

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 stalling.

Intermediate term: Prices are trending.

By the way, prices are vulnerable to a correction towards 66.66.

The projected upper bound is: 71.93.

The projected lower bound is: 66.47.

The projected closing price is: 69.20.

RIO TINTO FPO closed down -1.800 at 69.120. Volume was 44% above average (neutral) and Bollinger Bands were 11% wider than normal.

Open         High            Low           Close        Volume
69.000      69.680       68.790       69.120      3,038,162

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

Moving Averages: 10-period       50-period      200-period
Close:                       69.44              67.07              63.77
Volatility:                31                     26                   31
Volume:                   2,066,651      2,018,744      2,315,574

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 gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
RIO TINTO FPO is currently 8.4% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 3 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 65.3405. This is not an overbought or oversold reading. The last signal was a sell 0 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 53.83. 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 106 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 12. This is not a topping or bottoming area. The last signal was a sell 0 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 12 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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