In a move similar to other material names, BHP Billiton (BHP) made an upside correction from its January lows, but now a downward retracement is under way. This is all part of the process of making a bottom.
In this daily chart, above, of BHP, we can see prices stayed above the downward-sloping 200-day moving average line for about two weeks. Prices have declined in recent days back below this long-term trend-following indicator and they could soon retest the 50-day average line. Mirroring the price move, the On-Balance-Volume (OBV) line improved slightly in March and into April but it has flattened out and turned lower in the past two weeks. The price momentum study has weakened to the zero line without a bearish divergence.
In this weekly chart of BHP, above, we see prices could soon go back below the 40-week moving average line. Even though prices went up, the OBV line has been neutral on this time frame. The Moving Average Convergence Divergence oscillator gave a cover-shorts buy signal in February but has not crossed above the zero line for an outright go-long signal. Considering the current state of our favorite indicators, a selloff into the $25-$20 area could evolve as part of a longer-term basing pattern.