Is RIO breaking down?

Here’s a bit of fun. I’m no card carrying technician but the action in RIO has been interesting this week as its price underperforms the general risk rebound. It’s down again today trading at $57 on soft foreign leads despite the rise in the iron ore price and a glance at the daily chart suggests further weakness may be ahead:

RIO has fallen through its recent selloff low in the mid $57s and appears likely to retest its 2015 uptrend line that began with a convincing and bullish double bottom. The weekly chart is more bearish:

This pattern could either be a neutral symmetrical triangle or a much bigger bearish descending triangle. I’d opt for the latter.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.