Iron-Ore has plunged 40% this year, but we still feel BHP will fall ~30% further. RIO was +6.6% overseas, as it considers a merger with Glencore to create the...

Nicholas Forsyth

Market Matters

Iron-Ore has plunged 40% this year, but we still feel BHP will fall ~30% further. RIO was +6.6% overseas, as it considers a merger with Glencore to create the world's largest Iron-Ore producer. Iron-ore prices have plunged 41% this year, I see no short/medium term change in this trend. Vale, the largest Iron Ore producer in the world had fallen over 70% since 2011. FMG, I now see a test of $3 before any bounce. I could implement a trading buy when we test trend line support. RIO has over 70% dependency for earnings on Iron-ore, remains neutral technically, but current downside momentum points to a test of the $50 area. I would be a trading seller into any spikes on Glencore merger talks. BHP, Australia's most inherited asset, is negative on a short term basis targeting the $30.50-$31 region. However, BHP trading on the ADR market, is extremely bearish, targeting a fall of 50%. While I stress this is in $US, it still has BHP at $22 locally if the $A falls to 60c to help its valuation on the ASX200. (VIEW LINK)


Nicholas Forsyth
Nicholas Forsyth
Director
Market Matters

Market Matters is an online investment and share trading advisory service designed for those that want to take their wealth further. We specialise in advice for active share market investors, including those new to the markets or those with a Self...

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