Rio Tinto stock (NYSE: RIO) jumped more than 40% in the last six months (126 trading days) and currently trades at $86 per share. The sharp rally was driven by a recovery in global iron ore prices. Iron ore price per ton currently stands at $176, which reflects an increase of more than 45% in the last six months and more than double in the last one year. Additionally, the lifting of lockdowns over recent months and successful vaccine rollout has led to expectations of healthy growth in shipments in 2021 as demand gets back on track and supply constraints are reduced. The recent increase in Covid cases is one risk that the company faces, as re-imposition of lockdowns will delay the recovery process in revenues and earnings. But, expectations of more economic stimulus packages and a loose monetary policy will keep iron ore prices elevated as investment in infrastructure increases. So, after the recent rally will RIO’s stock continue its upward trajectory over the coming weeks, or is a correction in the stock more likely?
According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price data for the last ten years, returns for RIO stock average close to 12% in the next six-month (126 trading days) period after experiencing a 43% rise over the previous six-month (126 trading days) period. Notably, the stock is likely to perform similar to the S&P500 over the next six months.
But how would these numbers change if you are interested in holding Rio Tinto stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning to test Rio Tinto stock’s chances of a rise after a fall and vice versa. You can test the chance of recovery over different time intervals of a quarter, month, or even just 1 day!
