Will the RIO TINTO share price continue to decline?

Rio Tinto Ltd Technical Analysis Summary

Below 89.06

Stop sale

Above 92.6

stop loss

Indicator Signal
IRS Neutral
MACD To buy
Donchian Channel Neutral
MA(200) Sale
Fractals Sale
Parabolic SAR Sale

Graphic analysis of Rio Tinto Ltd

Technical analysis of the RIO TINTO stock price chart on a daily basis shows that #A-RIO, Daily is moving back below the 200-day moving average MA (200) after bouncing to a high two months ago four weeks. We believe the bearish momentum will continue after the price broke the lower boundary of the Donchian channel at 89.06. This level can be used as an entry point to place a pending sell order. The stop loss can be placed above the fractal high at 92.60. After placing the order, the stop loss should be moved daily to the next fractal high, following the signals from the parabolic indicator. Thus, we modify the expected profit/loss ratio to the break-even point. If the price reaches the stop loss level (92.60) without reaching the order (89.06), we recommend canceling the order: the market has undergone internal changes that have not been taken into account.

Fundamental Equity Analysis – Rio Tinto Ltd

Shares of RIO TINTO fell after a report that the miner faces lawsuits in the United States for overrunning the costs of the Mongolian mine. Will the RIO TINTO share price continue to decline?

Rio Tinto Plc is a listed Anglo-Australian multinational mining company headquartered in London, United Kingdom. The company’s market capitalization is A$133.41 billion. Shares of Rio are trading at a P/E (Trailing Twelve Months) ratio of 5.96. The company had revenue of $60.19 billion (ttm), return on assets (ttm) of 14.46% and return on equity (ttm) of 32.83%. A US court has ruled that Rio Tinto Plc faces a lawsuit accusing the mining giant of covering up delays and huge cost overruns at a Mongolian copper and gold mine owned by Turquoise Hill Resources in which Rio Tinto owns a majority stake. Pentwater Capital Management LP, Turquoise’s largest minority shareholder with a roughly 10% stake, accuses Rio Tinto and Turquoise of fraudulently assuring the $5.3 billion Oyu Tolgoi mine was “on plan” and “on budget” even as it fell 2-1/2 years behind schedule and over budget by $1.9 billion. Turquoise shareholders, who are seeking damages from Rio, said their investments lost nearly three-quarters of their value when the truth emerged. Rio Tinto said Pentwater’s allegations were unfounded and said it had always complied with its disclosure obligations. Earlier this month, Rio Tinto agreed to pay around $3.3 billion for the 49% of Turquoise it does not already own. RIO TINTO shares fell 1.1% the day after news of the lawsuit was released. The possibility of great legal liability is bearish for a company’s stock price.


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Karen J. Nelson