A Major Low For BHP Shares?

This story features BHP GROUP LIMITED. For more info SHARE ANALYSIS: BHP

The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

The Chartist's technical analysis suggests shares in BHP Group ((BHP)) might have formed a significant low on price charts, now offering support.

Bottom Line

18/7:
Daily Trend: Up
Weekly Trend: Up
Monthly Trend: Neutral
Support levels: $33.25 $31.66
Resistance levels: $50.84 (all-time high)

Calendar Events:
Report Date: August 19 2025   Ex-Div Date: T.B.A

Technical Discussion

Reasons to be ready for a turnaround:
-The 4Q was positive, with iron ore and coal exceeding forecasts.
-Management has stated that unit cost is on track to meet FY25 guidance.
-FY26 guidance is flat, with first production at the Jansen potash project expected in mid-2027.
-Rising copper output and sustained free cash flow could be bullish catalysts.
-Starting to turn around from a potential reversal zone.

“We’ve been singing the praises of the weekly chart of BHP for some time. Not that we’ve been bullish over the short term, yet steps in the right direction have been taken. Indeed, they continue to be taken”. The above still applies. Not only that, but there are signs that a significant low could be locked in. Indeed, that’s how I have labelled the chart, albeit more on that below.

One of the main positives is that the upper boundary of the zone of resistance has been overcome, meaning it should now be acting as support. That wasn’t the case during our last review, so it’s another step in the right direction.

As we’ve said several times over the past few months, many of the miners appear to be in the latter stages of large corrective patterns. The one here commenced all the way back in mid-2021. No doubt there have been some frustrated investors, but that could be about to change. Let’s take a look at why.

We’ll continue to focus on the patterns from the early 2016 low. It’s where a significant retracement completed wave-[2], providing clarity. The massive rally that followed completed a multi-year trend into wave-(1) in July 2021.

The ideal scenario has been for a running flat correction to complete wave-(2). I have now pencilled it in at the recent pivot low. It’s the only addition to our labelling, yet it is what we were looking for.

If correct, strong and impulsive price action should be the way forward. In other words, we’ll know soon enough if our bullish interpretation of the patterns is correct.

One thing we don’t want is for the rally to run out of steam over the coming weeks. Even a sideways meander would be a reason for concern and put a question mark over our analysis. For now, the smaller degree patterns are doing everything asked of them, so we’ll go with the flow.

Strength over the past few weeks likely comes on the back of Type-A bullish divergence on this weekly timeframe. This is where price makes a lower low whilst our oscillator fails to confirm weakness by making a higher low.

It’s not infallible, but it usually proves to be significant one way or the other. It has here, but our indicator has now reached the overbought position.

That’s not a reason to expect weakness, it just means the tailwind has blown itself out. From a pattern perspective, there is no reason why the current trend can’t continue.

Trading Strategy

We’ve had a pending trade on the ASX position status page for BHP since the 24^th of April. In other words, we’ve had to remain patient.

That’s fine, as we still need to wait for the bullish trigger to be hit before entering. Being hasty doesn’t usually end well.

Either way, the buy level is $42.28, with the protective stop sitting just beneath the lower boundary of support at $36.00. There is plenty of upside potential, so it’s best to use a trailing stop to manage the position.

Re-published with permission of the publisher. www.thechartist.com.au All copyright remains with the publisher. The above views expressed are not by association FNArena’s (see our disclaimer).

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