BHP BILLITON & RIO TINTO

Rio Tinto Group is an multinational exploration, development, production and processing corporation with headquarters in London, United Kingdom. The company was founded in 1873. It is among the world leaders in the production of many commodities, including aluminium, iron ore, copper, uranium, coal, and diamonds.The company has operations on six continents but is mainly concentrated in Australia and Canada.

BHP Billiton is a global mining, oil and gas company headquartered in Melbourne, Australia and with a major management office in London, United Kingdom. It is the world’s largest mining company. BHP Billiton operates a wide variety of mining and processing operations in 25 countries.

Everyday I review several charts, I look at different countries indices and their blue-chip companies. Australia drew my attention due to its underperformance over the past one year. So I decided to spend more time analyzing the S&P ASX 50 constituents. Here are two interesting analysis that I would like to share on this post. I’m asking what is wrong with the commodity play Australia and its major mining companies?

Both stocks failed to break above their 200 day moving averages during the past 6 month strength in global equity markets. More worrying is that they both formed bearish continuation patterns which are likely to resolve on the downside in the following months. BHP BILLITON formed a clear symmetrical triangle below the long-term average with the boundaries standing at 37.80 and 34.50. RIO TINTO formed a flag or a wedge pattern as bearish as BHP BILLITON’s symmetrical triangle. RIO TINTO has 69 as resistance and 59 as major support.

So the question is why are these blue chips lagging and also suggesting further weakness? Are they discounting weaker global growth and demand?