RIO enjoyed a healthy gain today, on a day where the rest of the market generally failed. However, looking closer at the daily chart, a doji pattern emerged. This only helps to confirm that RIO is stuck in a consolidation phase where it is looking for direction. Bulls are still looking to target a clean break of 68.71, the 50% retracement of February 2011 highs, and then 69.34, the current cycle high. For the moment, trading range seems restricted to 67.25 and 69.20, and until we see RIO move out of this range it will be hard to gauge whether bulls still have the upper hand. Bears will point to current levels teetering close to the upper bollinger band, which may quickly result in sustained selling pressure. But bears should also note that MACD may be turning bullish in the near term.
The weekly chart paints a slightly different picture, with the 100WMA seemingly providing support for now. This week is primed for a test of overhanging resistance dating from early 2011, with bulls looking for a break out towards the upper end of the aforementioned short-term trading range. Also materialising may be a golden cross of the 10WMA & 100WMA, which may be of concern to bears.
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