- A 12 month daily chart of Rio Tinto for 2016
2. A weekly chart of Rio over the past 5 years
It is a truism that charts can only ever show past price movements, and cannot foretell future variations. A single chart is a snap shot of a moment in time that will never be replicated but it may still be helpful. It may for example alert the careful observer of a change in trend (the general direction of price movement).
The weekly chart above shows a V shaped change in trend from the 5/2/2016 which is still intact. Since then there has been an impressive jump in the share price from just over $36 to just over $63 within the space of 12 months. This change in direction was one well-worth watching for!
The latest price movement is above the resistance-support level of $59, and at the moment the appearance looks as though a double-top pattern, a frequent harbinger of trend change, may be forming. This is where the appearances of a single chart can be misleading. It is just too soon to tell. Even if a double-top is formed, it is more likely that it will be a correction that will find support at about the trend-line and perhaps create a more favourable entry at about $55 for prospective buyers.
In such situations investors should seek the opinion of a competent stock-broker.