Will BHP Billiton break resistance, or will it fall again back to 1488p December lows?

• BHP shares trading in a narrowing range since late May.
• Bounced 5 off falling highs resistance, most recently off 1638p yesterday.
• Currently trades at 1612p (at the time of writing).
• Shares moving lower toward April rising support around 1490p.
• Will the pattern repeat itself, shares testing previous lows?
• 14 Dec: Brokers at Credit Suisse say there’s “not enough upside” to recommend “Buy” now after a cautious view on China’s steel market.
• Shares -9.5% from 2018 highs; +20.9% from 2018 lows; +5.9% year-to-date
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

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Trading BHP – An Example

Let’s say you like the range, you think it’s heading back towards 1490p again. You decide to sell exposure to £10,000 worth of BHP using a CFD, at the current price of 1612p. To do this, you need £2,000.

Let’s assume BHP falls back to 1490p (-7.5%). Your profit would be £750, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 3% from the current price. BHP rises 3% and hits your stop-loss. Your loss would be £300.

This is provided for information purposes only. It should not be taken as a recommendation.