sinking ship, page-12

MMM, FMG peaked early January (around that price twice) along with most/all stocks in the IO sector on the back of China's December growth figures and forecast for this year, but the whole sector pulled back starting the second week, and the coal sector started to pull back somewhat just after.

Essentially these sectors got a little overheated and when that happens the heat has to take time to dissipate. But the good news for FMG and the sector is the outlook for China's IO demand is still stronger than ever, despite some recent murmurings about tightening of lending over there. That will translate to IO prices come negotiations time and in turn to higher valuation of the company. Will that be in time for the SP to surpass 550 by March? No reason why it wont get to that price by then (although the double top at that price this month will provide some resistance to going further for a short time). I suspect once we get past the current market "funk" FMG will return to posting solid SP growth.

So, sinking ship? Hardly!

Cheers, Sharks.