| |
BHP Billiton is oversold and could rally
Joe Meyer
Posted: Thu, 17 Jul 2008
[miningmx.com] -- The BHP Billiton share price look set to rally, according to technical analysis by Market Signals.
Introduction
We show three panes in the chart of Billiton below. In the top pane we show an indicator that reflects the overbought-oversold status of the share price.
In the centre pane we show the daily price change with a 144 day simple moving average and at the bottom we show the performance of Billiton relative to the JSE Alsi40 index.
Click on image to enlarge
Analysis
In the top pane we see that the overbought-oversold indicator is in the oversold territory. From here shares tend to advance towards the overbought zone.
When we look at the daily chart of Billiton in the centre pane our attention is drawn to specifically 3 lines. The first (line 1) is an upward sloping support line that contained most of the previous declines. The second line (line 2) is a horizontal line at R250 that first acted as resistance and now acts as support.
The 144 day simple moving average (red line) also acted as good support in the
past. In the lower pane we see that Billiton has been outperforming the JSE Alsi40. This is indicated by the rising blue line above the red line.
Conclusion
Billiton is on support at R265 and oversold while outperforming the larger Alsi40 index. These conditions make for favourable conditions for an advance that could carry towards R350.
We will know that our outlook is incorrect if the R250 support fails. This could be followed with a decline towards line 3 at R195.
Technical Analysis powered by Market Signals.
For more Technical Analysis and recommendations on shares, indices and commodities please go to: http://www.fin24.com/marketsignals/
| |
0% 
;)
