Toppy pattern noted in big miners (BHP, RIO, AAL)

Shortage and oversupply are two recurring features of the commodity market. The former drives prices higher; the latter lower.

In recent months, iron ore certainly belonged to the former as Vale’s Vargem Grande Complex mine – a big supplier of the commodity – shut down. Beneficiaries of this included Rio, BHP, and Anglo.

But as Vale resumes operations of the mining complex, investors are now expecting iron ore’s supply-demand equation to return to equilibrium gradually. This removes one big bullish factor on iron ore miners. Results are immediate.

BHP, for example, is developing a medium-term top after a failed upside breakout at 2,050p (see below).

 

Rio Tinto’s reacted more sharply. Prices gapped down after hitting 5,000p. The stocks is threatening the 150-day exponential moving average (see Featured Chart).

Anglo American too had a failed uptrend reassertion at 2,300p, although short-term support is noted at 2,100p.

This means that the miners’ relentless rise over the past six months could be under threat. I expect choppier trends in this sector as some investors may decide to cash part of their chips.

Compare Vetted Investing, Trading & Currency Accounts

Investing AccountsTrading PlatformsCurrency Transfers
Compare Investment Accounts

Compare Investment Accounts

Compare Trading Platforms

Compare Trading Platforms

Compare Currency Brokers

Compare Currency Brokers

Investment Advice Disclaimer

ALL INVESTING CONTAIN RISK: The information contained in this website is for informational purposes only and does not constitute financial advice. The material does not contain (and should not be construed as containing) investment advice or an investment recommendation, or, an offer of or solicitation for, a transaction in any financial instrument. Always seeking independent financial advice.