$FMG - FORTESCUE METALS - New all time high on breakout

FORTESCUE METALS - New all time high on breakout

Fortescue has been a strong performer this year with Australia’s iron ore export earnings also forecast to soar to the second highest level on record this financial year bolstered by supply disruptions in Brazil after the tailings dam collapse. Fortescue rallied up hard before momentum fell away at the end of February and most of March. Some interesting volume has come through and indicators have started to turn up again so might be a good time to enter or top up if it opens up on Monday. Added bonus is it has also pushed through the $7.00 psychological barrier so will hopefully start to build a base there and continue its run.

About Fortescue Metals Group

Fortescue Metals Group Limited is engaged in the exploration, development, production, processing and sale of iron ore. It owns and operates an integrated supply chain, including its approximately five berth Herb Elliott Port in Port Hedland and the heavy haul railway with approximately 42 ton axle load capacity over 620 kilometers of track. Its operations span over four mine sites in the Pilbara. The Chichester Hub, which includes the Cloudbreak and Christmas Creek mines, is located in the Chichester Ranges, and produces over 90 million tons per annum (mtpa) from three ore processing facilities. The Solomon Hub is located in the Hamersley Ranges, and includes the Firetail and Kings Valley mines, which produce in excess of 70 mtpa. The Company owns and operates its purpose designed rail and port facilities, constructed to deliver iron ore from its mines to Port Hedland and onto its customers. Its Iron Bridge Magnetite project is located over 100 kilometers south of Port Hedland.

My Indicator Entry Rules (needs to meet all):

• Price > EMA(9) (Trending up short term)
  
• EMA(9) > EMA(21) (Trending up short to medium term)
  
• Volume > Volume(30) (Others have become more interested in the stock)
  
• RSI(14) > 50 but < 80 (Has momentum but not overbought yet)
  
• OBV > EMA (30, OBV) (Volume is accelerating)
  
• ADX(14) > 25 (Strong momentum in the trend direction)
  

My Just Before I Buy Rules:

• Check all or most indicators are pointing up to confirm their direction
  
• Wait for price to move up > 2% (Headed in the right direction today)
  
• I'll check market depth to ensure lots of buyers and sellers at close price points to ensure demand and liquidity (ie I can get out quickly if I need to)
  
• I'll check for any company announcements to see whats driving the volume
  

My Indicator Warnings:

• RSI(14) < 40 (Interest falling)
  
• RSI(14) > 80 (Very overbought territory - may reverse)
  
• OBV < EMA (30, OBV) (Volume falling away, people losing interest at this price)
  

My Sell Rules:

• Trailing Stop at 1.5 to 2 x ATR (Depends how aggressive I want to be - means trend has ended for now)
  

OR if

• EMA(9) < EMA (21) (Trend has failed for now)
  

Comment:

Good 46% run since identified.

Comment:

Probably at another good value area for anyone looking for an entry.

Comment:

Comment:

Could be looking to continue its run on strong iron ore news after a pullback.