Last post I did for trading was on BHP which is a mining stock and primary holdings in the Aussie market. In the last article I mentioned that it is likely there is limited upside left for the stock having seen the clear uptrend in anticipation of the fiscal cliff resolution. How did the price move after? It went down… yes! I was right! The stock had gone down to 36.50 level. Now the next question is how low can it go ?
I wish I can say that I predicted that correctly in a snap. The truth is I’ve been following this stock for years, but just like maintaining a friendship, you would discover new things about that friend as situations arise or when you have an expectation but something else happened. OK, so here are a few things to know about my new friend BHP :
1. Price cycle – it has gone up and gone down, then maybe it’s time it goes up again (in a while!) I’m waiting for signal that it had hit the lower range already.
2. It is very reactive to news and reports. Have to watch out for the quarterly and half-yearly reports, demand-supply picture.
3. An uptake in volume can lead to price rise.
Know more about how to develop expectation models for your stock, when you can expect it to change its price cycle, how much it tends to move in the range, how much profit you can generate per trade. Learn more from my workshops and webinars here . Register at service@highheeledtraders.com for our February webinars : Bull Run Investing and Retirement Investing.
