• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Basic Materials

BHP Billiton Looks Good From the Long Side

With bullishly aligned daily and weekly bar charts and only limited resistance on a Point and Figure chart, we have a bullish outlook for BHP.
By BRUCE KAMICH
Jul 17, 2017 | 09:06 AM EDT
Stocks quotes in this article: BHP

After a correction earlier this year, BHP Billiton (BHP) made a small double-bottom pattern in May and June. Prices have climbed steadily over the past few weeks, and are now poised for a test of their January highs.

Let's check the latest charts and indicators to see if prices can follow through on the upside. In this daily bar chart of BHP, below, we can see a rally and a correction that dominated much of the past twelve months. From last July until late January, BHP traded higher, with a rising 50-day moving average line and a rising 200-day average line.

Prices made a lower high in February and then a lower low in March to start a downtrend. Prices corrected from above $41 to below $34 by May. In late May, there was a bounce to the upside that lifted prices above the declining 50-day average and above the rising 200-day average line.

Prices pulled back to successfully retest the May low in June. A stronger rally took hold in late June to break above the May high. Halfway through July, BHP is above both the now rising (again) 50-day average and the 200-day average.

Now check out the bullish movement of the On-Balance-Volume (OBV) line, as the line rose with the price action from July to February -- showing that buyers of BHP were more aggressive. As prices corrected in March through May, the OBV line only made a shallow decline -- telling us that investors stayed largely bullish. In June, the OBV turned higher again with the price action. The trend-following Moving Average Convergence Divergence (MACD) oscillator is above the zero line in a bullish mode.

The "bigger picture" can be seen in this weekly chart of BHP, above, showing a decline from above $65 to a brief move below $20. Prices doubled from $20 to $40 with the 40-week moving average line reversing from a downtrend to an uptrend. The weekly OBV line rose for the rally and then pulled back during the correction earlier this year. In the bottom panel, the MACD oscillator on this timeframe is poised to turn up to a fresh go long signal.

In this Point and Figure chart of BHP, above, we can see only one trade at $40 as resistance. A trade at $41 will be a breakout and allow for a $49 price target/projection.

Bottom line: With bullishly aligned daily and weekly bar charts and only limited resistance seen on a Point and Figure chart, we have to have a positive or bullish outlook for BHP in the weeks ahead. Traders could approach the long side of BHP risking below $36 looking for a rally to the $49-$50 area.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are restricted from trading individual securities.

TAGS: Investing | U.S. Equity | Basic Materials | Markets | Stocks

More from Basic Materials

Looking for Higher Highs After a Trex Correction

Bruce Kamich
Jan 22, 2021 12:20 PM EST

Some new accumulation (buying) around the $85 area should set the stage for further gains.

PotlachDeltic's Charts Are Strong Like the Housing Market

Bruce Kamich
Dec 30, 2020 10:45 AM EST

Here's where aggressive traders could look to go long PCH.

Iron Ore Soars, But Will the Pinch Between Supply and Demand Continue?

Maleeha Bengali
Dec 9, 2020 10:00 AM EST

For now, China's infrastructure-led stimulus efforts are helping drive demand for iron ore at a time when production is under pressure.

The Doctor Is In and Probably Isn't Going Away

Ed Ponsi
Dec 8, 2020 9:00 AM EST

Copper has had a nice run, and the likelihood the worst of the pandemic soon could be behind us could mean increased consumption ahead.

Despite Crowded Stores, Lowe's Charts Have Turned Lower

Bruce Kamich
Dec 2, 2020 12:17 PM EST

Avoid the long side of LOW until fresh support develops.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:35 AM EST CHRIS VERSACE

    Another Big Winner for Stocks Under $10

    We're ringing the register Tuesday morning.
  • 08:05 AM EST GARY BERMAN

    Tuesday Morning Fibocall for 1/26/2021

    SPX (Long-Term View) The 1/21/21 NEW high @ 3861...
  • 09:52 AM EST GARY BERMAN

    INDU/DIA 20 DMA

    Fibocall: The DIA has the 20 DMA @ 307.81 and w...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login