One of the world's largest commodity conglomerates, Rio Tinto is seeing gains today amid positive news surrounding the company's stock:
- Analysts at JP Morgan have upgraded and raised their price recommendation on Rio Tinto shares signaling nearly 11% upside potential for the current valuation increase;
- The company today officially confirmed the opening of the company's most advanced iron ore mine 'Gudai Darra', the 17th in the company's 'fleet', located in Pilbara, Western Australia. Iron ore is one of the key commodities mined by RioTinto, along with aluminum and copper;
- RioTinto's stock price has been losing ground in recent times due to a decline in demand for iron ore and a direct drop in iron ore prices. A projected slowdown in global manufacturing and weak economic data also contributed to the weaker sentiment;
- RioTinto shares with a market capitalization of over £64 billion are 'weighing' heavily on the FTSE (UK100) index and contributing to its gains today.
Rio Tinto (RIO.UK) shares, W1 interval. The share price has been in an uptrend since the beginning of the pandemic and has suffered little from the crisis in global markets. The stock is trading in line with the uptrend line, from which the price has already bounced three times. The most recent declines were prevented in the fall of 2021. However, the price was not able to stay long above the 23.6 Fibonacci retracement, which it managed to break through three times. Each time, however, demand came back and knocked it down in the direction of 53 GBP where 38.2 abolition is located and bulls are now fighting to maintain this level. If the recession scenario is resolved and markets return to growths we may again observe a rally in commodity prices, which may positively influence RioTinto valuation. Potentially, however, recession and decline in industrial production in China, despite the favorable recommendations of JP Morgan, may contribute to a broader weakening and breaking the resistance near GBP 45, which coincides with the 61.8 Fibonacci retracement of the wave. Source: xStation5