Firstly we start with the big picture MONTHLY to see where we are and drill BHP down with WEEKLY as well as DAILY.
An anticipated XABC correction study is shown on the chart which may or may not eventuate. If it is to happen C = $18.14 which in theory, where the last leg of the correction/downtrend should end (more or less).
Long term support dating back to 2005 is also marked. I treat these long term support levels as SMART MONEY intervention in most cases where a floor is put under a decline by the more informed operators in the markets. Like fund managers, big institutions etc..Who are happy to buy at wholesale and sell at retail, later on during a mark up phase.
Support once again is pretty evident if we look at the last couple of candles. Last candle is yet to be completed since this is a monthly chart, which should be noted.
Below is the MONTHLY BHP CHART.
Now to the WEEKLY CHART below. We know where we are on the MONTHLY (Long Term Support).
I have now switched to WEEKLY in order to see more swings and roundabouts which can not be seen on the MONTHLY CHART after noting my LONG TERM SUPPORT. Waiting some sort of a signal to take a long position. Please look at the zone highlighted with green on the left hand side marked as “Long 1” which happened Dec. 2014 and Jan. 2015 and compare that to last and this weeks price action where I have marked as “Long 2”. Both cases BHP makes a LOW six weeks prior to making another marginal low. What happens in this situations ? Technical trader who likes selling 12 month lows may decide to sell BHP as soon as he/she gets a signal probably unaware of the BIG PICTURE on MONTHLY. Becoming overly BEARISH @ MAJOR CHART SUPPORTS, not so wise with stocks like MAJOR BANKS and stocks like BHP in my opinion. A new short sell probably been initiated to see the price action immediately reverse forcing him/her to cover. That means buy BHP to cover your short. Funds (Smart Money) also in accumulation mode at this major support, causing an above average buying and the result is an impulse bullish candle at a major support.
DAILY CHART BELOW to fine tune our LONG entry the WYCKOFF WAY !
01/10 was the SHORT TERM LONG ENTRY (marked on the chart). And BHP is now at a SHORT TERM RESISTANCE which may return to $22 – $23 zone, until the long term accumulation is complete, which is still in effect. But a short term long signal with decent gains may sum this weeks BHP price behaviour.
I did not take this trade by the way. For me it was a choice between GEAR ETF or BHP on my first day of trading after my holiday. I went for the GEAR ETF instead, applying similar strategy.
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