After reaching an important support level, Rio Tinto (RIO) could be a good stock pick from a technical perspective. RIO surpassed resistance at the 50-day moving average, suggesting a short-term bullish trend.
The 50-day simple moving average is a widely used technical indicator that helps determine support or resistance levels for different types of securities. It’s one of three major moving averages, but takes precedent because it’s the first sign of an up or down trend.
Over the past four weeks, RIO has gained 7.9%. The company is currently ranked a Zacks Rank #1 (Strong Buy), another strong indication the stock could move even higher.
The bullish case solidifies once investors consider RIO’s positive earnings estimate revisions. No estimate has gone lower in the past two months for the current fiscal year, compared to 3 higher, while the consensus estimate has increased too.
Investors should think about putting RIO on their watchlist given the ultra-important technical indicator and positive move in earnings estimate revisions.
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