Have you ever watched a stock grind sideways for years and suddenly thought, “This thing is finally waking up”? That’s exactly what’s happening right now with one of the biggest names in mining. A stock that felt forgotten by the market just punched through a ceiling that had capped it since 2021. And the best part? The momentum indicators are screaming that this move has legs.
I’m talking about Rio Tinto. Yeah, the same company that digs up more iron ore than most countries combined. While everyone was busy chasing tech and crypto, the industrial metals corner quietly built a base. And now the charts are saying the party might be starting.
A Breakout Four Years in the Making
Let me paint the picture. Imagine a stock trapped under a sloping line drawn across the peaks of 2021, 2022, and 2024. Every time it got close, sellers showed up and pushed it back down. Classic downtrend resistance.
Then November happened.
Rio Tinto didn’t just test that line again – it smashed straight through it on expanding volume. That’s the textbook definition of a multi-year breakout. When price finally closes above resistance that’s been in place for half a decade, you have to sit up and pay attention.
“The breakout resolves a multiyear consolidation phase to the upside – a bullish development for the months ahead.”
In my experience, these kinds of structural breaks tend to stick. The psychology flips. Bears who were short for years suddenly cover. Fund managers who underweighted the name scramble to catch up. It creates its own tailwind.
The Monthly MACD Just Turned Bullish – That’s Rare
Let’s zoom out to the monthly chart because this is where things get really interesting.
The monthly Moving Average Convergence Divergence (MACD) just crossed into positive territory for the first time since the 2021 commodity peak. If you’ve followed commodities for any length of time, you know how slowly that indicator moves on higher timeframes. When it flips, it usually means a secular shift in momentum.
Think about it this way: the last time the monthly MACD was positive, iron ore was trading above $150 and Rio shares were pushing $90. The fact that we’re seeing this signal again near $70 tells me the upside potential is substantial.
Intermediate-Term Uptrend Remains Intact
Closer in, the weekly and daily charts look equally constructive.
- Price continues to respect its rising 50-day moving average (currently around $70)
- Weekly MACD remains in a clear uptrend
- Stochastics just generated a fresh “pop” above 80 – historically a strong continuation signal
Put simply, there’s no technical damage whatsoever. Every pullback has been shallow and quickly bought. That’s the hallmark of an intermediate-term bull market.
First Major Target: $79 (61.8% Fibonacci)
So where could this thing go?
The most obvious measured move comes from the massive base formed between 2021 and 2025. Taking the height of that range and projecting it upward from the breakout point gives us a target near $79 – almost exactly the 61.8% retracement of the entire 2021-2022 bear market.
That level has acted as rock-solid resistance twice before. A decisive push above $79 would likely trigger another wave of algorithmic buying and short covering. In other words, the move could get violent to the upside.
Relative Strength Is Turning Decisively Higher
Perhaps the most under-appreciated part of this setup is how Rio Tinto is performing relative to the broader market.
If you chart the RIO/SPX ratio (Rio divided by the S&P 500), you’ll see a beautiful multi-year rounded bottom taking shape. The ratio has now reclaimed its 40-week moving average – a level that marked the difference between outperformance and underperformance throughout the post-COVID period.
When a stock starts beating the market after years of lagging, institutions take notice. Allocation shifts follow. And those shifts tend to be sticky.
“The improved setup in the ratio suggests RIO is likely to outperform the broader equity market in the first half of 2026.”
Why Industrial Metals Are Waking Up Now
Let’s take a step back and ask the bigger question: why is this happening now?
Precious metals stole the show for most of 2024 and 2025, but the industrial complex – copper, aluminum, iron ore – spent those years digesting the post-pandemic hangover. Inventories were high, China’s property sector was moribund, and global manufacturing PMIs were stuck below 50.
Fast forward to late 2025 and several things have changed:
- China has rolled out repeated stimulus packages specifically targeting infrastructure and grid spending
- Global electricity demand is exploding thanks to AI data centers and electrification
- Copper supply responses have been slower than almost anyone predicted
- Iron ore port inventories in China have been drawing down for months
In short, the supply/demand balance for industrial metals is tightening at exactly the moment global growth expectations are bottoming. That’s the perfect fundamental backdrop for a sustained commodity rally.
Rio Tinto’s Unique Position in the Food Chain
Not all mining companies are created equal, and Rio sits at the very top of the food chain for several reasons.
First, its Pilbara iron ore operations in Western Australia are simply unmatched – low-cost, high-grade, and fully integrated with its own rail and port network. When iron ore prices move $10, Rio’s cash flow swings by billions.
Second, the company has massive exposure to aluminum and copper through its ownership of stakes in some of the world’s best deposits. These are the exact metals that will power the energy transition and AI buildout.
Third – and this gets overlooked – Rio has one of the strongest balance sheets in the sector. Net debt is negligible, the dividend yield sits above 5%, and buybacks continue. That financial flexibility means management can keep returning capital even if commodity prices take a breather.
Risks? Of Course – But They’re Manageable
Look, nothing goes straight up. Anyone telling you otherwise is selling something.
The obvious risks here are:
- A hard landing in China that crushes commodity demand
- Significant new supply coming online faster than expected
- General equity market turbulence dragging everything lower
But here’s the thing: the current technical setup already prices in a fair amount of skepticism. The stock spent four years going nowhere. Most investors gave up on it. Sentiment is still far from euphoric.
In my experience, that’s exactly when the best risk/reward opportunities present themselves.
How to Think About Positioning
If you’re convinced by the setup (and I am), the cleanest way to play it is simply owning the shares. Rio trades on both the London and New York exchanges, with the ADR (ticker: RIO) being the most liquid for U.S. investors.
Key levels I’m watching:
| Support | Level | Action |
| Former resistance (now support) | $68–$70 | Strong buy zone |
| 50-day MA | ~$70 | Trend support |
| Major target | $79 | First significant resistance |
| Stretch target | $90+ | If monthly momentum stays strong |
A stop below $65 would give the trade plenty of room while still keeping risk defined.
The Bottom Line
Sometimes the best opportunities are hiding in plain sight. While everyone was looking elsewhere, Rio Tinto spent years building one of the cleanest multi-year bases I’ve seen in the commodity space.
The breakout is confirmed. Long-term momentum has turned bullish. Relative strength is improving fast. And the fundamental backdrop for industrial metals is finally aligning.
Put it all together and you have a setup that doesn’t come around very often. In a market that feels increasingly difficult to navigate, that’s worth paying attention to.
Whether Rio Tinto becomes the leader of the next commodity bull market remains to be seen. But right now, the weight of the evidence is clearly pointing higher.
And in this business, that’s usually enough.
