Let's Check on Teck as a Potential Buyer Circles
What's the play now with reports of interest from Rio Tinto?
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News reports Friday indicate that Rio Tinto RIO is considering a potential bid for Teck Resources TECK. In my June 3 update on Teck Resources TECK I wrote that "...traders should continue to hold those previously recommended purchases....$64 and $76 are my new price targets."
Let's go visit the charts again in light of this latest news.
In the daily bar chart of TECK, below, I can see that prices pulled back in June and began firming again in July. TECK trades back above the 50-day moving average line again. The slope of the 200-day line is positive and the indicator intersects down around $43.
Trading volume declined in the past three months but the On-Balance-Volume (OBV) line remained steady and tells me that buyers of TECK have remained more aggressive than sellers. The trend-following Moving Average Convergence Divergence (MACD) oscillator is slightly below the zero line so a new buy signal could be seen soon.
In the weekly Japanese candlestick chart of TECK, below, I can see that the stock has rallied the past three years. The slope of the 40-week moving average line is bullish.
The weekly OBV line is still on an upward path. The MACD oscillator is correcting slightly.
In this daily Point and Figure chart of TECK, below, I can see an upside price target in the $65 area.
In this weekly Point and Figure chart of TECK, below, I can see a price target in the $62 area.
Bottom-line strategy: I have no special knowledge of what is going on in the boardrooms of TECK or RIO or any other company. If there is a M&A deal being considered for TECK it will have to be at some premium to today's price, I believe.
I have no problem with taking some gains on strength.
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