Technicals | Dec 04 2018
By Michael Gable
Two months have passed since the markets started to take a tumble and we are now seeing signs that investors are looking for reasons to be optimistic again. We may get a rally here followed by another dip, but the worst seems to be over. This gives investors a chance to make a trade here and sell into the strength and get ready to position once again to buy the next dip.
This week's charting section spots an opportunity in BHP Billiton ((BHP)).
The daily and weekly charts of BHP look a bit messy but price action becomes clearer on the monthly chart. We can see that $35 has been a major resistance level for BHP during the last five years (adjusted for the S32 spin-off). It has failed at that level again but we can see that the selling wasn't very heavy. The recent pullback has also sat on top of the prior low from earlier this year. Consolidating under this $35 level tells us that the shares are getting ready for an eventual push through it. If they do, that would set it up for a run towards $40.
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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
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