BHP has violated the support level set during GFC, but we are now trading above it ( @ close 24/12/2015). These sorts of technical violations, if fail to hold, are considered nothing other than a whipsaw intra month ( we are analysing a monthly chart) breaks to potentially shake weak holders out. To early to come to that conclusion yet, but it is probable.
Since 2007, looking at this Monthly Chart of BHP, it’s price action may be best described as Range bound ( TR/trading range). See Support as well as Resistance lines drawn in solid Blue. That will change if I see a decisive violation of the GFC low over the coming months. So far, that support is being respected, despite this latest violation, since we are currently trading above it.
If on the other hand, one looks at the period from April 2011 Peak to current Low, that is a down trend without a doubt. See two dashed Blue Trend Lines. Trends/counter trends in different time frames are always in existence. Has been and will be.
Below is the Monthly BHP Chart as @ 26/12/2015.
Now we are looking at the GFC price action behaviour of BHP ( next chart below), in the next lower time frame weekly for some clues as to what may happen at present ?
All studies on the chart. SOS candle on increased spread in price action as well as volume was the giveaway back then.
Below is the BHP, GFC weekly chart.
Current BHP Weekly Chart as @ Close 24/12/2015 below. I will also zoom in to the right hand side of the chart after this.
ZOOMING IN TO THE LATEST PRICE ACTION BEHAVIOUR OF BHP WEEKLY BELOW.
The PIVOT POINT REVERSAL (Bar Chart reversal Candles shown) on hand, suggesting a BULLISH price action behaviour over the next 5-10 week period. This may see us testing the supply line of the down trending channel, as well as the prior support now turning resistance. That level is the zone of $24-$26.
Below is the last Tentative Bearish Price Objective taken from the re distribution pattern which was @ $16.30. Most recent low was at $16.27.
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