BHP dominated by bears dragging the market lower throughout the day
BHP Billiton Limited (BHP) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, BHP finished Wednesday at 55.88 gaining $0.48 (0.87%) on high volume, significantly outperforming the S&P 500 (-0.46%). The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (BHP as at Sep 16, 2020):
Wednesday's trading range has been $0.78 (1.38%), that's below the last trading month's daily average range of $0.98. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for BHP.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical resistance level at 55.92 (R1).
Although the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
With prices trading close to this year's high at 58.35, upside momentum could speed up should the market be able to break out to new highs for the year. As prices are trading close to September's high at 56.95, upside momentum might accelerate should the share mark new highs for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for BHP Billiton. Out of 511 times, BHP closed higher 53.82% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after seven trading days, showing a win rate of 53.23% with an average market move of 0.30%.