Playing BHP

This story features BHP GROUP LIMITED. For more info SHARE ANALYSIS: BHP

By Michael Gable 

The Australian market has been heading lower the last couple of weeks, led by the materials and energy sector. However, these are the very sectors that helped give it it's massive rally from early April. We have been bullish on commodity stocks for a while now and have been fortunate in picking the turning points in BHP, among others. We still remain of the view that it is worth buying the dip in that sector. So, in today's report, we have a chart for BHP ((BHP)). Assuming you already have taken profits, we show you where the levels are to be buying back in.

When the share price of BHP pulls back, it tends to retrace to the 38.2% Fibonacci level. That is, when BHP peaked in early 2017, it retraced about 38.2% of the 2016 – 2017 uptrend. Then when it peaked again in January this year, it retraced about 38.2% of the rally from June 2017 to January 2018, which was the $28 level. Now that it has once again peaked, we are expecting it to fall back towards $30. There will be some small support right at current levels near $32, but ultimately if it can't rally from here, then we are looking to buy back in at $30.

Content included in this article is not by association the view of FNArena (see our disclaimer).
 
Michael Gable is managing Director of  Fairmont Equities (www.fairmontequities.com)

Fairmont Equities is a share advisory firm assisting Private Clients with the professional management of their share portfolio. We are based in the Sydney CBD but provide services to private clients across Australia. We believe that the concepts of fundamental analysis and technical analysis of stocks are not mutually exclusive. Regardless of whether you are a trader or long term investor, combining both methods is crucial to success. As a result, the unique analysis of Fairmont Equities is featured regularly in the media such as Sky News Business, CNBC, The Australian Financial Review, and the ASX newsletter. Contact us for a free trial of our research and information on our portfolio management services. 

Michael is RG146 Accredited and holds the following formal qualifications:

• Bachelor of Engineering, Hons. (University of Sydney) 
• Bachelor of Commerce (University of Sydney) 
• Diploma of Mortgage Lending (Finsia) 
• Diploma of Financial Services [Financial Planning] (Finsia) 
• Completion of ASX Accredited Derivatives Adviser Levels 1 & 2

Disclaimer

Fairmont Equities Australia (ACN 615 592 802) is a holder of an Australian Financial Services License (No. 494022). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.
 

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