FMG has exploded in price this week off the back of some terrible news coming from the Vale Disaster where a tailings dam has given way killing 100s. The market has reacted to this news on fear that global supplies of iron will be threatened. Surely there will be disruptions to the iron supplies in the short term however the market has overreacted. A tailings dam will often be associated with one mine deposit and it is know that Vale operates multiple mines with an extensive supply network. It is likely the affected mine will be closed, whilst the rest remain operational.
From the chart, we see several indicators dropping off, namely the RSI, Volumes and MACD. Support level will be hard to judge but could sit at $5 in the next few months.
Furthermore, there are signs of improving market sentiment on the back of interest rates remaining low and good signs of earnings from US companies, this could in the short term support prices.
en.wikipedia.org/wiki/Vale_(company)#/media/File:FCA_e_Vit%C3%B3ria_a_Minas_railroads.jpg
From the chart, we see several indicators dropping off, namely the RSI, Volumes and MACD. Support level will be hard to judge but could sit at $5 in the next few months.
Furthermore, there are signs of improving market sentiment on the back of interest rates remaining low and good signs of earnings from US companies, this could in the short term support prices.
en.wikipedia.org/wiki/Vale_(company)#/media/File:FCA_e_Vit%C3%B3ria_a_Minas_railroads.jpg
Comment:
Right on the money, but helped by negative news on trade talks
"Brazilian miner Vale has declared force majeure on some iron ore contracts after a court-ordered halt to a mine responsible for nearly 9 per cent of its output following a dam burst which likely killed more than 300 people."
thewest.com.au/busin...p-300-ng-b881096244z