Revising Iron Ore target lower

Iron Ore has now fallen to the $124 target (currently trading at $119) which I have been writing about, however I am now revising my downside target to the $99 level.

The chart below shows the price of Iron Ore converging to its 200 week moving average.

Mean reversion is another topic I have been harping on about lately too, especially amongst commodities and selected stocks which have soared to extremes and more so those price charts resembling parabolas.

This means I now look for Fortescue Metals (FMG.AX) to trade down to the $15.50 mark and BHP (BHP.AX) to visit $38.50 with $34.50 presenting a compelling entry point.

While all of that is going on, cheaper iron ore means better profits for steel makers.

September 16, 2021

by Rob Zdravevski

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