Technical Analyst, Saxo Bank Group
Rio Tinto released weaker than expected earnings after Market close Wednesday Sydney time.
Medium term on a weekly chart the share price is in a falling trend.
It has tested the longer term rising trendline a few times the past couple of weeks and if it closes below there is some support at around 87.28. If that support is broken it could fuel a sell-off down to around 70. Weekly RSI is below 40 in a falling trend supporting the bearish outlook.
However, short term the share is treading water – daily chart. Key resistance around 100. RSI is showing negative sentiment but there is divergence i.e., selling pressure has been weakening. However, if RSI closes below its rising trend line lows around 91.91 is likely to be tested and quite possibly taken out.
For this bearish scenario to be reversed a daily close above 100.35 is needed. If that unfolds a move towards strong resistance at around 106 is likely.
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