Technicals | Jul 19 2010
This story features BHP GROUP LIMITED. For more info SHARE ANALYSIS: BHP
By Rudi Filapek-Vandyck
It has not escaped the TechWizard's attention that BHP Billiton ((BHP)) shares have spent the past 13 weeks below their 20 daily moving average (M/A) and the shares are again weaker as week number 14 has started on Monday morning.
The Wizard believes BHP shares are now at a critical level. In the next few weeks the shares have to get back above the 20 M/A on a weekly closing basis, says the Wizard, or the bulls simply will not get back on board.
In price terms, this means BHP shares have to close above $40.50. The shares opened below $38 on Monday morning.
On the other hand, the Wizard reports market bears should be watching the $35 level closely because if that level were to be breached to the downside on a weekly closing basis this would equal a resumption of the bear market for BHP shares.
Were the latter scenario to happen, the Wizard reports he'd expect the shares to continue weakening on route to a test of the October 2008 lows.
The TechWizard is the pseudonym of Scott Morrison, whose experience in financial markets exceeds twenty years. Morrison operates his own website nowadays at www.techwizard.com.au The views expressed are his, not FNArena's (see our disclaimer).
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