Will BHP turn, or will it continue to rise beyond 1803p?

• The chart shows price action for BHP since mid-June
• The shares have broken above a trendline of falling resistance around 1666p
• Currently trading at 1701p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Shares -1.4% from 2019 highs; +6.5% from 2019 lows; +2.9% year-to-date.
• 8 Jan: Analysts at Citi say miners are much more resilient to a bust than years past, thanks to more efficient mines and better balance sheets.
• 17 Dec: BHP announces $1/share special dividend
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading BHP – An Example

Let’s say the breakout appeals to you, you think it’s likely to continue. You decide to buy exposure to £10,000 worth of BHP  using a CFD, at the current price of 1701p. To do this, you need £2,000.

Let’s assume the BHP trend continues to 1803p June highs (+6%). Your profit would be £600, 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 breaks lower, falling 3% and it hits your stop-loss. Your loss would be £300.

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