Technicals | Jan 19 2021
Michael Gable of Fairmont Equities believes BHP Group shares have further upside left, after an already dizzying run since November
By Michael Gable
Content included in this article is not by association the view of FNArena (see our disclaimer).
We've made a number of positive comments on resource stocks, most notably BHP Group ((BHP)), as recently as early November when it was still under $40.
This monthly chart now puts the recent move into perspective. BHP has now broken above a line of resistance which has been in place for over 12 years. With the general rule of thumb being that the longer the consolidation, the bigger the breakout, then BHP's move is only the start of a major rally.
Some may also look at price action of the last 12 years as a massive inverse head and shoulders. Those who try to extrapolate targets with these patterns may lead to believe that BHP has more than $20 upside from here. But take that with a grain of salt.
The major point is that BHP has broken above long-term resistance here and this means that the share price should have some decent upside ahead of it.