The share prices of RIO and BHP are both approaching key support levels which could create investment opportunities.
The are both trading below their 30-day moving averages but are close to support $58.80 and $23.50, respectfully.
The attached charts show that these support line have held and became good buying levels for a move higher over the last six months.
However, we are mindful of the importance of exports to China for both of these companies. Overnight, China’s five largest banks reported earnings which showed steady results but increases in the percentage of non-performing loans tied to real estate.
It’s worth noting that Chins’a top five banks are considered the largest in the world in terms of assets. A sharp contraction in any of those five could trigger weakness in RIO and BHP