Will the mining stocks continue their resurgence?

By Kenneth Robson on July 31, 2017 • ( 0 )

This is a weekly chart of bellwether mining stock BHP Limited extending over the past 9 years.

Investors are accustomed to seeing gradual, and protracted, up-trending share prices, terminated by abrupt and usually unexpected, precipitous falls, leaving them well out of pocket.

BHP has been different. In a two and a half year period between the end of 2008 and April 2011 the share-price more than doubled from $20 to a high of $45.

On the other hand it took five years for the optimism of record profit results to be supplanted by market pessimism that took the share-price to an eventual low of $14 before rebounding to support resistance at $27.50 in 2016.

For most of that time the share-price traded in a range between $27.50 and $36, with limited opportunity to profit from capital gain.

BHP Wk July 31, 2017.png

Recently the share-price has been in a triangular trading range from which there has now been a breakout to the upside.

Retail investors are warned that they should not base their trading decisions on technical analysis alone, and to seek the advice of their stock-broker or other qualified financial advisor.

However chart analysis suggests that their may be a second leg to the uptrend of 2016 which could carry the share-price to the support/resistance level of about $36.