Will Rio Tinto break lower, or will it rise to 4016p again?

• The Rio Tinto trading range developed since mid-September.
• Shares bounced back from support zone around 3489p, most recently last week.
• Now trading 3575p (at time of writing).
• Will the pattern repeat itself, testing previous highs?
• Shares -21% from 2018 highs; +3.6% from 2018 lows; -9.3% year-to-date
• 6 Dec: Investment bank Wilsons is bullish on Australian miners, saying free-cash-flow generation is likely to be significant.
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

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Trading Rio Tinto – An Example

Let’s say you like the Rio Tinto range, you think it’s heading back towards 4016p again. You decide to buy exposure to £10,000 worth of Rio Tinto using a CFD, at the current price of 3489p. To do this, you need £2,000.

Let’s assume Rio Tinto rises back to 4016p (+15.1%). Your profit would be £1510, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 8% from the current price. Rio Tinto falls 8% and hits your stop-loss. Your loss would be £800.

This is provided for information purposes only. It should not be taken as a recommendation.