China Weighs on the Base Metals

This morning, many of the leading base and industrial metal stocks are declining lower at the start of the trading session. This important sector is highly affected by the Chinese economy and stock market. Last night, the important Shanghai Index finished lower by 3.67 percent. The decline occurred after the Chinese government announced a new 20 percent tax on any home that is sold. Remember, higher taxes are always a negative for markets.

One of the leading base metal stocks is Rio Tinto plc (ADR) (NYSE:RIO). Today, RIO is trading lower by $1.68 to $50.06 a share. Short term traders should watch for intra-day support around the $50.00, and $48.83 levels. The daily chart for RIO shows very good support around the $47.00 level which is gap fill from late November 2012.

Some other leading base and industrial stocks that are also coming under selling pressure today include BHP Billiton Limited (ADR) (NYSE:BHP), Vale SA (ADR) (NYSE:VALE), and and Teck Resources Ltd (USA) (NYSE:TCK). Traders should remember that the action in the U.S. Dollar Index will also impact these stocks from day to day.

About Nicholas Santiago 575 Articles


Nicholas Santiago started trading in 1991. In 1997, he became a licensed Series 7 and 63 registered representative. He managed money for a large, affluent private client group. After applying his knowledge to his client base, he decided it was time to begin teaching those interested in learning his methods. He is an expert in Technical Analysis. He has become an accomplished technician in the studies of Elliot Wave, Gann Theory, Dow Theory and Cycle Theory. In 2007, he partnered with Gareth Soloway to form InTheMoneyStocks.Com and realize his dream of educating others about the truth of the markets.

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