BHP and its share price during 2015

by Michael Gable

In the short term there appears to be potential for BHP to make a move up towards about $30.50 and that could then provide an opportunity for covered call writing. This is because if it fails there, we may continue to see it drift sideways and use up some more time or perhaps even make a very quick drop towards support just above $24. The stock is showing some similar characteristics to September 2011 where it fell from nearly $50, down towards $34. The stock managed to bounce around for about 6 months before making a final low. On this weekly chart, we can see that it created divergence with the weekly RSI, and that was therefore a strong buy signal. So while the stock is currently showing divergence on the daily chart, and being oversold on the weekly chart, if we see this divergence occur again on the weekly chart then that would be a very strong buy signal. So traders may want to sell on any rally here but longer term holders could consider holding on, picking up the 4.6% dividend yield, writing calls on any rally to boost that income, with a view to consider adding to positions if we do get a quick dip towards $24.


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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