The Rio Tinto share price has not been left behind in the recent stock sell-off. The RIO stock is trading at 5,265p, which is about 8% below the highest level last week. It dropped by over 0.80% in Australia even after the company made some good news.
Rio Tinto is one of the biggest mining stocks in the world. The company has a market capitalization of over $114 billion and is publicly traded in London and Sydney. American investors can invest in the company by buying American Depositary Receipts (ADR).
Rio Tinto deals with a wide variety of commodities such as iron ore, aluminum, copper, borates, lithium, diamonds, salt, and titanium oxide. It has operations in tens of countries such as Australia, Canada, Iceland, Madagascar, and Mongolia.
Like most mining companies, Rio Tinto has done relatively well in the past two years because of the rising demand for commodities. In this period, these companies have announced record sales and boosted their dividends.
The biggest catalyst for the Rio Tinto share price is the deal between the company and Mongolia. The feud involved the Oyu Tolgoi copper mine. This means that the company will invest about $6.93 billion into the project.
Rio Tinto share price forecast
The daily chart shows that the RIO share price has been in a strong bullish trend in the past few weeks. It has managed to rise by about 21% from the lowest level since November. The stock managed to move slightly above the key resistance level at 5,150p, which was the highest level in October.
Now, the Rio Tinto share price has dropped and retested the key support at 5,150p. In price action analysis, a break and retest pattern is usually a sign of continuation.
Therefore, there is a likelihood that the stock will bounce back in the near term. If this happens, the next key resistance level to watch will be at 5,700p. On the flip side, a move below the support at 5,100p will invalidate this view.