BHP Group’s Pullback Opportunity

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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

Michael Gable of Fairmont Equities considers weakness in BHP's share price a buying opportunity, with bullish technical indicators pointing towards a potential new record high.

By Michael Gable 

Even if the war in Iran ended tomorrow, we all appreciate the after-effects will be felt for many months afterwards.

The net result for our economy and day-to-day life is largely negative and this will be reflected in the share market.

As an investor, the best way to make money from broken supply chains and rising inflation is to invest in hard assets.

The last couple of days have seen resource stocks decouple from the rest of the market, so we may now finally be seeing resources start to outperform the rest of the market again.

In terms of energy, we still believe this is only just the start of a large move, and it’s not just about oil and gas.

Coal and uranium will be major beneficiaries of recent events.  We were bullish on coal and uranium before the war started, but they now look even more bullish.

Countries will now be even more focused on obtaining energy security and the quickest and cheapest way to do that is to increase the amount of power generated by coal and uranium.

The Japanese, for instance, were already on track to restart a range of nuclear reactors and they are now also restarting coal-fired power stations. Taiwan is also restarting reactors.

This adds to the 75 reactors that were already under construction before the war started. 

We had a supply deficit before, and that will now only increase.

Expect much higher coal and uranium prices.

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

We looked at BHP on a few occasions in the second half of last year, noting the various buying opportunities along the way.

BHP has once again provided us with a buy signal.

The recent pullback has seen it retrace half of the April-February rally, which is often a good area of support.

It has also formed a bullish engulfing pattern on the weekly chart.

BHP is likely to rally from here to new highs. Current levels are a buying opportunity.

Initial stops can be considered just under $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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