“With the Chinese government looking to add more stimulus and the US dollar looking like it is topping out, we should be on the cusp of another move higher in commodity stocks,” Michael said.

“In terms of iron ore, prices have proven to be quite resilient these past few weeks, despite the usual negativity in the press.

“The chart of FMG suggests that we should now see higher levels.

“After finding a low in September, FMG then bounced hard on strong volumes.

“From the start of October, however, it then proceeded to ease back on lower volumes to form a bull-flag (diagonal lines).

“The past few days have seen it break out of this bull flag (circled).

“This is a buying opportunity, as we now expect FMG to rally from here.

“We would be looking for levels up near $23-$24 before hitting resistance,” Michael said.

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