Is this trend a good trading opportunity?
Will Rio Tinto turn, or will it continue to rise to 2018 highs around 4540p?
- Shares +24.2% from November 2018 lows.
- Accident at rival Vale’s mine in Brazil spiked iron ore prices.
- 5 Jan: Brazil halting the use of dams over the mining accident.
- Now trading 4301.5p (at the time of writing).
- Will the positive momentum continue towards 4540p?
- Shares trading at 2019 highs; +19% from 2019 lows; +15.3% year-to-date.
- Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal
Trading Rio Tinto– An Example
Let’s say the trend appeals to you, you think it’s likely to continue. You decide to buy exposure to £10,000 worth of Rio Tinto using a CFD, at the current price of 4301.5p. To do this, you need £2,000.
Let’s assume the Rio Tinto trend continues to 2018 highs of 4540p (+5.5%). Your profit would be £550, from your initial investment of £2,000.
Conversely, let’s assume you open the above position, and place a stop-loss at 3% from the current price. Rio Tinto falls 3% and hits your stop-loss. Your loss would be £300.
This is provided for information purposes only. It should not be taken as a recommendation.