Tag: ASX:RIO

Copper prices jumped today as Chinese inflation data picked up last month, sending a reassuring signal about demand from the world’s largest consumer of industrial metals. China’s Producer Price Index rose 5.5% last month, which was better than the market expectation of 3.3%

The forward month red metal was up 2.9% at $2.60 per pound, posting its largest one-day gain in two months on the COMEX exchange in New York. A reduction in copper stocks at the LME will add short-term support to the upside for prices.

We expect to see firm resistance in the $2.74 area, which represents a “double top” chart pattern dating back to November.

A surprise jump in US inventory data extended the recent down move in crude oil prices. We now see solid support around the $50.00 level.

We still like the long side of oil names but feel investors should be adding covered call options to WPL and OSH to enhance the yield.

We’ve allowed upside to $27 in BHP and upside in RIO to $63 before capping out our short term gains.

Iron Ore prices continued its two month rally last Friday and trading close to the $80.00 per ton level for the first time in over two years. According to spot metals pricing, the benchmark 62% fine rose another 3.5% to 79.60 on Friday, extending its four-day rally to an impressive 13.2%.

The benchmark price has now gained over 82% so far in 2016, and has risen 108% from the all-time low of $38.30 per ton posted on December 11, 2015. The rally corresponds to the news that Chinese policymakers had managed to remove 88 million tons of steelmaking capacity across the country since the beginning of the year.

This has help trigger gains in steel prices, along with Iron Ore.

BHP and RIO have performed well, we look to keep exposure to these names and add to the cash flow through selling covered call options.