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BHP: Positive Sign

Technicals | May 03 2022

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

By Michael Gable 

Last week, we had flagged the possibility of an "inverse head and shoulders" pattern on the S&P500 Index, which would have been bullish. Weakness since then has now thrown that possibility out the window. Instead, we now have the index making new lows for the year. The trigger for the next move will be the Fed Reserve interest rate decision on Wednesday in the US.

With almost everyone becoming more and more bearish on rates, we need to be mindful that a relief rally is a real possibility. We can't predict the future, but with the S&P500 Index down here, we either see a nice rebound from Thursday onwards, or a capitulation to lower levels (as we saw in December 2018).

The S&P 500 Index is literally on the edge of a cliff here, with it now sitting at some major support.

In terms of stocks this week, we have a chart on BHP Group ((BHP)).

Although the sell down at the end of April was very sharp, BHP managed to form a "higher low" by staying above the March low. After that initial bounce, it has managed to hold in well here near $48, instead of falling back with the broader market. This is a positive sign, and it is telling us that BHP has a good chance of recovering from here to head back above $50 fairly soon.

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

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


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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