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Iron Ore Miners: Buy The Dips

Technicals | Jul 22 2020

Bottom Line 21/07/20

Daily Trend: N/A
Weekly Trend: Up
Monthly Trend: Up
Support Levels: 78.60 / 75.58 / 64.77
Resistance Levels: 111.00 /  123.19 / 142.80

Technical Discussion

Reasons for a sustained breather medium term:
→ Chinese demand remaining overall consistent
→ relentless production by the majors still in force
→ larger multi year [A]-[B]-[C] move north remains in play
→ price has remained robust throughout the early 2020 global market turmoil

The key here really is time. These higher degree patterns take time to complete, even basis the weekly chart that we are viewing here. Yet our trend interpretation implies that when the Wave-[B] does finally complete, a longer term Wave-[C] move to even higher levels will be the next cab off the rank…’

Everything from our perspective continues to remain on track. From a timing perspective we would still like to see the larger degree Wave-[B] take a little more time to complete via an A-B-C move as annotated on our chart tonight. Price is presently well overbought. So a pullback down towards the [US$/t] 90.00 mark would be more than acceptable. Such a move over the coming weeks would also likely unwind our divergence indicator back to oversold. Which would then create a platform for the next longer term bull run north to evolve from. A move that would have the potential to being 3 – 4 years in the making.

So if the above scenario were to unfold short to medium term, with buyers returning strongly circa the 90.00 price zone, then looking well ahead, a Wave-[A] vs Wave-[C] equality move would be targeting 170.00+. We continue to see immense bullish potential in this price chart, on the condition that the February 2020 lows circa 78.33, continue to hold strong from here.

Trading Strategy

From a trading perspective, the ASX Iron Ore big guns in BHP, RIO and FMG are the stocks we keep an eye on. And all three have been performing well, with Fortescue Metals clearly being the star performer. Any dips over the coming weeks on the Iron Ore Chart will should bring these stocks and others related to the sector, well and truly onto your trading radars. So keep an eye on Pete’s ASX Research Area and Craig’s power-setups over the coming months in regards to Iron Ore stocks potentially coming up on their trading radars !

Re-published with permission of the publisher. www.thechartist.com.au All copyright remains with the publisher. The above views expressed are not by association FNArena's (see our disclaimer).

This report may contain advice that has been prepared by The Chartist Pty Ltd (ABN 40 641 323 051). The Chartist Pty Ltd is a Corporate Authorised Representative (CAR No. 1282007) of Shartru Wealth Management Pty Ltd ABN 46 158 536 871, AFSL 422409. Any advice is considered general advice and has been prepared without taking into account your objectives, financial situation or needs. Because of that, before acting on this advice you should therefore consider the appropriateness of the advice having regard to your situation and your own objectives, financial situation and needs. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. If the advice relates to the acquisition, or possible acquisition, of a product (other than a security e.g. a CFD) then the client should obtain the relevant Product Disclosure Document and consider it before making any decision about whether to acquire the product. Past performance is not a reliable indication of future performance. This material has been prepared based on information believed to be accurate at the time of publication. Subsequent changes in circumstances may occur at any time and may impact the accuracy of the information.

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