Rio Tinto Limited (ASX:RIO) HEFFX Highlights

Rio Tinto Limited (ASX:RIO) HEFFX Highlights

Rio Tinto Limited (ASX:RIO) HEFFX Highlights

  • RBC Capital Markets’ Tyler Broda turned slightly less bullish on Rio Tinto plc (ADR) RIO 1.23%by downgrading the London-listed stock rating from Top Pick to Outperform with an unchanged 4,200p price target, which implies upside from Tuesday’s opening price of 3,382.50p.
  • One of the reasons to support a continued bullish stance can be traced to Chinese structural reforms that benefit Rio Tinto, the analyst stated. China’s supply side reforms and increased focus on the environment benefits Rio’s iron ore and aluminum exposure, which is expected to account for 79 percent of the company’s 2017 EBITDA.
  • Meanwhile, Rio Tinto successfully rebalanced its cash returns, balance sheet and growth requirements, which reaffirms the company’s “conservative and sound position,” Broda continued. In addition, investors shouldn’t rule out the possibility of persistent special dividends and a total dividend yield of 8 percent (6.37 percent on the NYSE listed stock) will continue attracting investor attention moving forward.

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: Sideways.

Short term: Prices are stalling.

Intermediate term: Prices are ranging.

The projected upper bound is: 65.54.

The projected lower bound is: 60.13.

The projected closing price is: 62.84.

RIO TINTO FPO closed down -0.600 at 62.820. Volume was 9% below average (neutral) and Bollinger Bands were 18% narrower than normal.

Open      High       Low      Close      Volume
63.660      63.800      62.660       62.820       2,116,396

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period      50-period      200-period
Close:      64.85      63.37      61.74
Volatility:      29      27       34
Volume:      2,192,906      2,244,073       2,407,024

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 1.8% above its 200-period moving average and is in an downward 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 volume flowing into and out of RIO.AX at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on RIO.AX and have had this outlook for the last 1 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 7.6324. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 14 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 42.36. 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 59 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 -136.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 4 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 sell 2 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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