Pushed up by the global demand for base metals and
mergers and acquisitions speculation, mining stocks are trading
at or near all-time highs. But many of these stocks are making price
bubbles with their price patterns showing parabolic upsides.
Rio Tinto (RTP),
a large mining conglomerate, is one such stock. Its price upside
is unsustainable, but when will this bubble burst?

Proponents for global growth tell us that strong demand for commodities
will continue for years. But at some point the demand will begin
to slow, at which time the commodity-based stocks will have significant
corrections.
The log chart for RTP shows what could happen. When the bubble
bursts, RTP could drop 50 percent or more and still be within its
long-term upside price channel.
Investors could be in for a bumpy ride.

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