A ‘Cup & Handle’ On BHP Price Chart

This story features BHP GROUP LIMITED.
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The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

BHP shares retesting the August low, then rallying to a recent high suggests the stock is poised to move higher, Fairmont Equities' Michael Gable reports.

By Michael Gable 

Volatility has been quite low for a few months now, so it was only a matter of time until US markets had a wobble.

However, half of Friday’s decline in the US has already been recovered and may well prove to be a storm in a tea cup.

The panic, of course, was over rare earths and this comes back to what we have been highlighting for a while now.

Commodities are entering a new boom period because years of underinvestment have led to problems with supply.

From the US perspective, rare earths is one of the biggest problems, but we will soon be hearing about uranium, copper, oil etc, as reality hits home.

We therefore continue to recommend investors stay overweight in commodities. 

Today, we offer a technical view on BHP Group ((BHP))

After pulling back in early September, BHP managed to hold above the August low before bouncing strongly to retest the recent high.

The past couple of weeks has seen it trade sideways under the recent high and the overall pattern since late-August now resembles that of a “cup and handle” formation.

This is a bullish sign and it indicates BHP is very close to making another decent move higher.

Current levels are a buying opportunity. The next major resistance level is near $46

Content included in this article is not by association the view of FNArena (see our disclaimer).
 
Michael Gable is managing Director of  Fairmont Equities (www.fairmontequities.com)

Fairmont Equities is a share advisory firm assisting Private Clients with the professional management of their share portfolio. We are based in the Sydney CBD but provide services to private clients across Australia. We believe that the concepts of fundamental analysis and technical analysis of stocks are not mutually exclusive. Regardless of whether you are a trader or long term investor, combining both methods is crucial to success. As a result, the unique analysis of Fairmont Equities is featured regularly in the media such as Sky News Business, CNBC, The Australian Financial Review, and the ASX newsletter. Contact us for a free trial of our research and information on our portfolio management services. 

Michael is RG146 Accredited and holds the following formal qualifications:

• Bachelor of Engineering, Hons. (University of Sydney) 
• Bachelor of Commerce (University of Sydney) 
• Diploma of Mortgage Lending (Finsia) 
• Diploma of Financial Services [Financial Planning] (Finsia) 
• Completion of ASX Accredited Derivatives Adviser Levels 1 & 2

Disclaimer

Fairmont Equities Australia (ACN 615 592 802) is a holder of an Australian Financial Services License (No. 494022). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.
 

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