SHORT FMG
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Just a simple technical analysis of the share price of FMG assuming continued correction from all time highs. Mostly just based on the Iron ore price having lost 55% from 2021 highs and still being 50% (while FMG is only down only 28%) down presently.
Mapped out some support / demand and resistance / supply zones. Thinking something around sub-$12 would be a good short-term target (although I expect a bounce at the $14 level). Also based on 1:1 extension of the deep correction and retrace and a 1.618 extension of what may be wave 1 & 2 of the last 5 waves down to complete the correction. They line up relatively closely, so it seems like a good spot.
Price may push above the 200EMA before continuing correction, although near-term upside potentially $19.50. We will see.
Fundamental... more and more speculation about the debt crisis unfolding in China in the property and banking sectors. We can never get the full picture. However, that combination of issues could seriously dent imports - especially construction steel.
Increasing possibility that anecdotal evidence of a steep drop-off in residential construction in China is accurate. But, we don't have to speculate that far given the weakness in global iron ore prices. While FMG's cost of production is around $15 per ton it will clearly still be profitable, there will be less profit and earnings forecasts due later this month are lower than the previous Q1 and any further weakness in global iron ore prices will probably prompt at least some investors to sell up and continue the downside correction.
Protect those funds.
Just a simple technical analysis of the share price of FMG assuming continued correction from all time highs. Mostly just based on the Iron ore price having lost 55% from 2021 highs and still being 50% (while FMG is only down only 28%) down presently.
Mapped out some support / demand and resistance / supply zones. Thinking something around sub-$12 would be a good short-term target (although I expect a bounce at the $14 level). Also based on 1:1 extension of the deep correction and retrace and a 1.618 extension of what may be wave 1 & 2 of the last 5 waves down to complete the correction. They line up relatively closely, so it seems like a good spot.
Price may push above the 200EMA before continuing correction, although near-term upside potentially $19.50. We will see.
Fundamental... more and more speculation about the debt crisis unfolding in China in the property and banking sectors. We can never get the full picture. However, that combination of issues could seriously dent imports - especially construction steel.
Increasing possibility that anecdotal evidence of a steep drop-off in residential construction in China is accurate. But, we don't have to speculate that far given the weakness in global iron ore prices. While FMG's cost of production is around $15 per ton it will clearly still be profitable, there will be less profit and earnings forecasts due later this month are lower than the previous Q1 and any further weakness in global iron ore prices will probably prompt at least some investors to sell up and continue the downside correction.
Protect those funds.
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