February 4, 2009
Sell Signals with Lower Peaks
By Planet Wealth
The Resources sector is one that has had a hard fall in this bear market. Companies that have always been seen as excellent stocks to buy are not fairing too well.
BHP has been a well loved stock in the past. Let’s take a look at what this stock is doing right now. As seen in the chart below, for the last 12 months it has been in a down trending channel. November and December saw BHP pushing higher, only to hit the top of the channel and a major resistance line at the beginning of the year. This channel and resistance has now been forcing the stock back down resulting in Lower Peaks (LP) and Lower Troughs (LT), indicating the sellers have taken control once again. There is a small amount of small term support at around $28.00. If the stock moves through this , it is likely to $25.00, the next major support.
(click on image to enlarge)
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