Anglo American

[dmedin]

Has sold off very heavily, but it looks like it hit rock bottom and it's bouncing back up.  Got to be worth a punt, my wee bairns?

[Mercury]

A punt Short you mean..?  I don't see where there is a Long here, unless you mean to play a short term scalp trade.  What is your trading trigger here?  Other than the fact it has dropped recently I mean and RSI looks over sold.  I don;t see the thesis for any sustained rally so a Long would be counter trend and short term.  Surely there must be safer better risk reward options out there?

Anglo, and general mining more widely, looks very bearish to me.  From a Fundamentals perspective the stuff they mine is losing value (except for Precious Metal miners).  If and when there is a recession their business will be further hit over and above the political headwinds currently in play.  If there is a deflationary phase they may get badly hit, unless there is a flight to real assets.  I'd look at the price charts for the stuff they mine before drawing any conclusion, this is the key driver of miners share price.

If you just look at Anglo long term you will see that the current rally peaked and turned at the Fib 62% off the all time highs, put in with a double top.  Since then there was a sharp sell off (1-5 wave) followed by a strong retrace (A-B-C) and then another 1-5 drop.  The recent rally looks like another A-B-C to me and price has recently broken down through the lower channel line of the rally.  There was strong NMD at the wave C turn on that Fib 62% resistance zone.

Now we may see a short term retest of the channel line or breakout zone but after than I would anticipate a further leg down.  Could be a good short at that point, although there could be a second retest before the Bear really gets going.

 

 

  

[dmedin]

I meant long for a bounce back up.  I did try to short Anglo American before but got caught out (they were buying back $1 bln of their own shares).

 

  Won't mining companies profit from the increase in price of precious metals?

[dmedin]

Big gap up this morning.

[dmedin]

Still buying back their own shares so as to drive price of the existing ones up

[dmedin]

Got a nice 50% retrace and now it's headed back south 😺