I have included a little info. in regards to ASX listed Gold Miners after the BHP.ASX analysis, which may also be worth reading.
I will only look at the short term daily technical of BHP.ASX at this last post of the year. The summary of it’s trend definition is as follows :
Long Term Trend : UP and STRONG.
Medium Term Trend : Trendless/Congested/Trading Range.
Short Term Trend : Down.
On the chart, most notable chart pattern is the trading range which BHP.ASX has been in since late November. Boundaries of this trading range is marked with solid Red SUPPORT & RESISTANCE LINES. This brings us to drilling this trading range down to see if it may turn out to be a RE ACCUMULATION or DISTRIBUTION TRADING RANGE ? For this, I will put out all the available evidence before me and be guided by the price action for confirmation. Price action as always is the most important single element on any chart, followed by volume.A helping hand from OBV (On Balance Volume) at the bottom window is sought for analysing the volume.
BHP had two failed tests at the zone of $26.70, making it a RESISTANCE ZONE to watch. Support @ $24.40 ZONE is still intact. Important ZONE of SUPPORT this zone is. Why ? Cluster of 50 period SMA ( Blue Simple Moving Average) and prior price support enhances it’s importance. RESISTANCE or SUPPORT break with a FOLLOW THROUGH is likely to determine the direction of its next medium term move.
OBV at the bottom window is less than impressive. It had broken down already as can be seen on the chart, which may suggest that price action may follow suit over the coming sessions. If we see a breakdown with the price action at current levels next level to watch may be the zone of $23 which acts as a long term demand/support line ( see dashed Blue Up Trend Line). This is it for BHP, for now anyway.
On a different note, my stance, as it has been for quite a some time is that we are in a phase of a bull run where commodities are likely to prosper. Should that be the case, markets likes ours, based on sound commodity stocks is likely to out perform some others. Also, despite all the short term negativity on the Aussie $, I believe that, it is likely to have a strong positive correlation with the commodities do over the coming Months.
The bull run which we are in, may last around 48-50 months. This is the average duration of a bull run ( trough to peak). Trough being Feb. this year which may suggest there may still be 3 more years in front of us. Selecting the right sectors of interest may be the most important homework for me personally.
A bit about ASX listed GOLD MINERS also : I will not include a chart for this.The price action behaviour of yesterday with most Gold Miners was typical AR ( Automatic Reaction) after a CLIMAX caused by short covering rally. These type of rallies may provide the cream not the milk but it requires employment of shorter term charts and proficiency in reading them. Retest of the CLIMAX low ( most recent low) is more likely than not which may be worth noting with Gold Miners. For example with NST that may be the zone of $3.00 – $3.20. Taking profits off the table was what I did with Gold Miners yesterday which reflects my short term trading approach in that sector at this moment in time.
BHP Daily Chart Below.
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