Buy signals – BHP & RIO

by Michael Gable

We have covered the BHP chart a few times already this year and spoken about the range that it has been trading in. Once again we have seen BHP get the bottom of its recent range, with the yield on the stock including franking pushing the 4% mark. We are also seeing the RSI become oversold again. As a result, there is a high chance that BHP should find support here and once again trade higher. 

RIO has dropped back after I recently highlighted the break of a head and shoulders pattern. Like BHP, RIO has also become oversold on the RSI. This daily chart shows that it has also formed a bullish engulfing pattern here. These are all circled. 

As a result, BHP and RIO have the potential to trade higher from here. One strategy that we are employing involves a bull put spread with the use of options, where we cap our gains, but importantly we cap our losses. (Obtain professional advice from your broker before using options)


Disclaimer: Michael Gable is an Authorised Representative (No. 376892) and Fairmont Equities is a Corporate Authorised Representative (No. 444397) of Novus Capital Limited (AFS Licence No. 238168). 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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