Rallies in the STOXX Europe 600 Basic Resources (SXPP) should be seen as selling opportunities, says Andy Dodd, Head of Technical Research at Louis Capital Markets.
Dodd points out that the SXPP sector is dominated by four stocks – Rio Tinto, BHP Billiton, Glencore and Anglo American – accounting for around 62% of the index weighting. It therefore makes sense to take a look at these in isolation and, as Dodd demonstrates in his report, all four stocks remain in a downtrend. As such, he says any rallies back up to their long-term downward trendlines should be seen as selling opportunities.
Read the full report.