Bullish setups for AMR and RIO

We received a request for technicals on Alpha Metallurgical Resources (AMR) and Rio Tinto (RIO). Both stocks have bullish patterns that point to more upside.

Alpha Metallurgical Resources (AMR) is coming out of a February-December basing pattern. Sustaining this week's rally above the 196 to 187 area (rising 200-week moving average and pattern neckline) would support this view with upside potential to the retracement levels for the March 2024 to June 2025 decline at 232-233 (38.2% retracement), 274-275 (50% retracement), and 316-317 (61.8% retracement). The upside projection for the basing pattern at 278 coincides with the 50% retracement level.

This week's low at 181.79 offers a risk management support since a move below that level would suggest a false breakout.

AMR is also breaking out from a February-December basing pattern relative to the S&P 500, which corroborates the absolute price pattern highlighted above.

Chart 1: Alpha Metallurgical Resources, Inc. (AMR) (top) and relative to the S&P 500 (bottom)

Rio Tinto (RIO) has cleared resistances near 72 and 75, which makes the case for a continued rally with the next resistance at 80.52 (2023 high) and into the 83.21 to 84.69 range (2022 highs) and further upside potential back to the 2021 peaks at 92.85-95.97. Prior resistances at 75 and 72 reverse their roles and now offer supports.

Chart 2: Rio Tinto PLC (RIO) (top) and relative to the S&P 500 (bottom)

Reclaiming the 61.8% Fibonacci retracement of RIO's 2021 to 2022 decline at 78.76 would make the case for a complete 100% retracement and a rally back to the 2021 peak at 95.97.

Chart 3: Rio Tinto PLC (RIO): Weekly chart with retracement levels

Thinking ahead....

RIO's monthly chart shows the potential for an even bigger base. A decisive rally above 91.96 (61.8% retracement of the May 2008 to December 2008 decline) and 95.97 (2021 peak) would confirm this view with longer-term potential back to the 2008 peak at 139.66.

Chart 4: Rio Tinto PLC (RIO): Monthly chart with retracement levels