Rio Tinto has finished its rebound and should now start a bearish trend.
From a fundamental viewpoint, the group is in a bad financial situation. Analysts have recently downgraded their forecasts for earnings per share (EPS). This indicator is often a precursor of a declining profitability and a worsening climate of investors' confidence.
Technically, the share has just finished its rebound and should continue in its downward long term trend. Moving averages are decreasing and are still above prices. The security is going toward the GBp 2616.5 support, a level that will represent the first target.
Investors could take a short position in Rio Tinto to target GBp 2616.5. They will also place a stop loss above the GBp 2865 resistance area, level that would invalidate our bearish strategy.