Upside For BHP

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

By Michael Gable 

Price action last week on our market shows why it is hard to take an aggressive position either way. Although we are still thinking that this month will see more short term bias, it is too difficult to short many positions because as soon as the market gets a sniff of a solution, it can bounce pretty quickly as seen last Friday. Sometimes it is best to not do much at all and adopt a wait and see approach, which has been our advice in the last few weeks. In the meantime, we have put in our 2 cents on what we think of the big four banks. When you think about where the market will be in 12 months time and what companies will outperform, the banks will not necessarily lead the way as they have in the last 12 months. With healthy dividends though, they will always have a place so we have a look at them all and provide some guidance as to which ones will fare the best.
 

BHP Billiton

 

When we last looked at BHP Billiton ((BHP)) on 17 September, it was trading at $36.20. At the time we wrote “The recent move up in BHP from late August was done in 3 waves which is normally a countertrend move. This implies that we could see BHP come back to levels as low as $34 at some point which would be the ideal entry point.” Having traded as low as $34.35, if it wasn’t for the indecisiveness in the general markets, we would say that BHP has reached a low and should be bought. However, any negative news from the US could see BHP take one last move back to the $34’s at which point investors can look to go long with limited downside. Upside targets remain over $40 on the back of a potential rally over Christmas.
 

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

Michael assists investors to achieve their goals by providing advice ranging from short term trading to longer term portfolio management, deals in all ASX listed securities and specialises in covered call writing to help long term investors protect their share portfolios and generate additional income.

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

Michael Gable is an Authorised Representative (No. 376892) and Fairmont Equities Pty Ltd is a Corporate Authorised Representative (No. 444397) of Novus Capital Limited (AFS Licence No. 238168). 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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