Short Trade with RIO

by Michael Gable

RIO has been in a downtrend for almost 2 years now. It has been forming a series of lower highs and lower lows. It has formed an island reversal, indicated in the image below. We can see another island reversal in early July and how the stock performed after that. By shorting it here around $54.90, we place a stop at $57.20, and it should go to a new low under $50.20. Based on those figures its a 2:1 return, but the stock will most likely extend to the $48 area, making it closer to a 3:1 risk reward ratio.

Disclaimer

Disclaimer: Michael Gable is an Authorised Representative (No. 376892) and Fairmont Equities is a Corporate Authorised Representative (No. 444397) of Novus Capital Limited (AFS Licence No. 238168). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.