BHP's bottoming pattern is short term bullish. It is an inverted head and shoulders pattern. You don't have to believe in pattern analysis to want to sit up and take notice of patterns from time to time. Patterns repeat themselves in markets every week. They repeat themselves in global markets too frequently to be caused by random chance. Why is this? Because stock price behaviour reflects human behaviour, human bias and the human interaction with time, price, wealth, speculation, greed, fear, love and hate. Yes, I do mean love and hate. People fall in love with stocks and people who lose money often hate the market.....for a short time at least.
The inverted head and shoulders pattern in the BHP chart has occured very quickly, suggesting that the market has quickly agreed that BHP, at around $34, is fundamentally a strong buying opportunity. The inverted head and shoulders pattern indicates attempts by the bears to push the stock below support on three separate occasions - at the start of each of the shoulder legs down and in the start of the head leg down. Each time the sell offs were met with bullish buyers stepping up to the plate on those uplegs that help to establish the second half of each shoulder and the second half of the head.
Using traditional technical analysis, we think BHP will rally quickly to $37.50.
If you like this post, try our four week trial of our Technical Report - click here to sign up!
The inverted head and shoulders pattern in the BHP chart has occured very quickly, suggesting that the market has quickly agreed that BHP, at around $34, is fundamentally a strong buying opportunity. The inverted head and shoulders pattern indicates attempts by the bears to push the stock below support on three separate occasions - at the start of each of the shoulder legs down and in the start of the head leg down. Each time the sell offs were met with bullish buyers stepping up to the plate on those uplegs that help to establish the second half of each shoulder and the second half of the head.
Using traditional technical analysis, we think BHP will rally quickly to $37.50.
If you like this post, try our four week trial of our Technical Report - click here to sign up!
