Fortescue Metals Group Ltd. explores for and produces iron ore. The Company conducts business worldwide.
The decision to short sell Fortescue is based upon two things; downgraded iron ore price forecasts and bearish technical momentum.
Demand for iron ore is weak and supply continues to surge, with Chinese producers unlikely to pick up the slack in any meaningful way coming into the traditional restocking period.
This was brought to bear overnight, with iron ore prices slumping a further 4.4%, to $71.80 per metric tonne.
On the technical front, FMG is displaying significant bearish momentum and the path of least resistance is clearly to the downside.