Rio Tinto (RTP),
a large mining conglomerate, is on a multi-year price upside. Its
stock price is near all-time highs and the key question for investors
is whether the stock has topped out.
The first long-term chart of weekly closes (log scale) shows RTP
to be near the upper boundary of the upside price channel that began
in 1998. Stocks usually decline once they hit the upper boundary.
But they can stay within the upside channel for years.
Another interpretation of RTP's long-term upside shows a price channel
that began in 1990 and prices that have risen well above the upper
boundary of the long-term upside price channel. This buuble view
indicates that RTP has a potential for a significant downside move
so it will eventually trade within the price channel boundaries.
Time will tell which interpretation is correct, but both charts
show that RTP is trading at extended prices.
Related Articles:
Metal Mining Stocks
Price Patterns - A
Bubble Top Is an Extreme Pattern
Price Patterns
- Support Levels May Constrain Price Downsides
Price Upsides
Often Occur in Three Stages
Rio Tinto Moves to the Downside
Posted August 17, 2007.
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