Why Rio Tinto could be the market's best-kept secret

Could Rio Tinto (ASX: RIO) be one of the most overlooked opportunities in the market right now?

Goldman Sachs certainly thinks so, calling it undervalued and predicting more than 20% upside in the next year. Add in a fully franked dividend yield of 5.5%, and it seems like a no-brainer.

But the real story goes beyond just valuation and dividends-there's a potential shake-up brewing that could send RIO's share price soaring, and it has to do with listing.

Activist investor Palliser Capital wants RIO to ditch its costly UK dual listing, arguing it has drained $50 billion from shareholders. If RIO follows BHP's lead and consolidates in Australia, it could unlock massive value-just as BHP's shares jumped more than 10% after its restructure in 2022.

Goldman is also bullish on RIO's growing copper production, expected to outpace BHP. With electrification and infrastructure spending driving demand, copper prices could hit $10,200/t in Q3 2025, boosting RIO's margins.

Technically, RIO has been trading between $114 and $124 since last October, with strong buying support at the lower end.

This range-bound action suggests a build up of pressure, and a breakout above $124 could trigger a sharp rally toward long-term resistance at $136. Historically, similar breakouts have led to sustained upward moves, however, if $124 holds as resistance, RIO may remain range-bound or retest lower levels before its next major move.

So, with undervaluation, a potential structural shift, and surging copper demand, RIO looks primed for upside. But will the market wake up to the opportunity?

What are the best and worst-performing sectors this week? 

The best-performing sectors include Utilities, up more than 1%, followed by Energy, up more than half a per cent and Real Estate, slightly down under half a per cent.

The worst performing sectors include Information Technology, down more than 5%, followed by Healthcare, down more than 4% and Consumer Discretionary, down more than 3%.

The best performing stocks in the ASX top 100 include Vivan Energy Group, up more than 4%, followed by APA Group and Mineral Resources, both up more than 3%.

The worst performing stocks include Qantas Airways, down 11%, followed by Flight Centre, down more than 9% and Pro Medicus, down more than 8%.

What's next for the Australian stock market? 

Sellers have dominated this week, pushing the All Ords down more than 2% and extending its slide to more than 10% from its February peak-officially putting the market in correction territory. But could there be a silver lining?

Historically, outside of COVID, a 10% correction often signals the end of a downtrend and the point where buyers step in. What makes this drop particularly interesting is its speed. The last five corrections of this magnitude took at least two months-sometimes up to a year-to play out. This time, it has happened in under four weeks.

Why does that matter? The lack of buyers during the sell-off suggests the recovery could be just as fast. Typically, prolonged corrections unfold in lower waves, with weak buyers meeting strong sellers. But when there are no buyers at all, sharp declines are often followed by equally sharp rebounds.

So, with the market now testing the key 7900 support level, buyers could soon emerge, creating the potential for a rapid turnaround. If 7900 holds, those prepared could take advantage of a swift rebound. If it breaks, then 7500 is the next major level where buyers may step in.

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