BHP is a powerhouse stock on the Australian Stock Exchange. It is the 2nd largest stock by capitalisation and it is a real market mover and shaker. Usually the market follows BHP's direction. So when it is bullish, our broader market typically follows.
Between April and July this year, BHP made a double bottom pattern. Underlying sentiment was weak and while we noted this double bottom pattern in our newsletter at the time, we chose not to buy into the stock. At the same time, Nick Radge and Steven Hogan noted the BHP double bottom but their disinterest in buying the stock (both made comments on the TV program Your Money, Your Call).
Yesterday BHP broke through $35 and closed at $35.17. Today it has gone on with the job. Coincidently, the underlying sentiment indicator that we prefer to use (55 day stochastic - refer to our book, Simple Tactics, Profitable Trading for our non traditional application of this indicator), also turned bullish.
We show the BHP chart below with a potential upside target marked on the chart.
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