BHP - 24/2/2010

Yesterday, I said that BHP was looking good, but to wait and see how things panned out today. I pointed out in that post that the Daily MACD had not crossed the ZERO line. It's one of my (very cautious) trading rules not to take trades on stocks where the MACD is below the ZERO line.

That caution paid off today.

BHP is now back below the 50-Day SMA. The chart is now left with a bearish island reversal of two candles sitting above the 50-Day SMA.

The Daily Williams %R has dipped marginally below the mid-line. The Daily RSI has also dipped marginally below the mid-line. Those are bearish developments.

The stock has also dipped below its short term uptrend line.

On the short term chart (10-days, one-hour intervals) there is no sign on the MACD Histogram of a divergence suggesting a move up. The RSI is below 50 but still well above the 20 mark where reversals often occur on the short term chart.

Good support lies around 40.50. A break of that would be ominous. A bounce there could keep hopes alive for a solid upward movement in BHP.

But - at the moment - all bets for BHP are off the table.

Cheers

Red