BHP Billiton Limited (ASX:BHP) Surge Up With Copper

BHP Billiton Limited (ASX:BHP) Surge Up With Copper

BHP Billiton Limited (ASX:BHP) Surge Up With Copper

Australian mining stocks are on fire Wednesday morning after copper prices surged 4% to a two year high overnight.

BHP Billiton (BHP.AU), the world’s largest miner, is up 3% and Rio Tinto (RIO.AU) is also up 3%. Copper is trading around $2.87 a pound.

But the star performers in the benchmark S&P/ASX200 Index are the copper miners, with OZ Minerals (OZL.AU) up almost 8% and Sandfire Resources (SFR.AU) up 7%. We covered OZ Minerals’ second quarter production report on Tuesday. Please read OZ Minerals: Copper Miner Unveils Solid 2Q Production, Cash Pile Grows.

BHP Billiton Limited is a global resources company. The Company is a producer of various commodities, including iron ore, metallurgical coal, copper and uranium. Its segments include Petroleum, Copper, Iron Ore and Coal. The Petroleum segment is engaged in the exploration, development and production of oil and gas. The Copper segment is engaged in mining of copper, silver, lead, zinc, molybdenum, uranium and gold. The Iron Ore segment is engaged in mining of iron ore. The Coal segment is engaged in mining of metallurgical coal and thermal (energy) coal. Its businesses include Minerals Australia, Minerals Americas, Petroleum and Marketing. The Company extracts and processes minerals, oil and gas from its production operations located primarily in Australia and the Americas. The Company manages product distribution through its global logistics chain, including freight and pipeline transportation. Its businesses include Minerals Australia, Minerals Americas, Petroleum and Marketing.

Overall, the bias in prices is: Upwards.

Short term: Prices are moving.

Intermediate term: Prices are trending.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 24.33.

The projected upper bound is: 26.61.

The projected lower bound is: 24.75.

The projected closing price is: 25.68.

BHP BLT FPO closed up 0.280 at 25.650. Volume was 48% above average (neutral) and Bollinger Bands were 4% wider than normal.

Open          High         Low          Close        Volume
25.620      25.860      25.580     25.650      12,642,808

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period      50-period     200-period
Close:                       24.97             23.92             24.57
Volatility:                25                   25                   33
Volume:                  7,370,519      9,010,875      8,750,866

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

BHP BLT FPO gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
BHP BLT FPO is currently 4.4% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into BHP.AX (mildly bullish). Our trend forecasting oscillators are currently bullish on BHP.AX and have had this outlook for the last 15 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 76.4296. This is not an overbought or oversold reading. The last signal was a buy 1 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 68.79. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 7 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 175.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 7 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 3 period(s) ago.

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John Heffernan

John Heffernan is a Junior Analyst at HEFFX. John is studying Economics and is a contributor on equities at Live Trading News.

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