Yes, I can see your point (I actually came to very similar conclusions). But risk either way to me is relatively equal (though I add analysis of the XMJ to this regarding the long side), long or short (hence I did not take the trade, no confluence here). The close was well above resistance/support, which is positive, however the next few days will be crucial.
The decreasing volume over the last few months is EXTREMELLY worrying for this breakout and why I did not take the trade.
RSI definately only confirmation. MACD, don't use it.
Yeah, I find breakouts really tough these days because a lot of them turn out to be up fakes.... my rule of thumb, never chase the breakout.... MOST cases it always comes back to that level for testing where it broke out... if it holds well then buy
About BHP, it will probably hold up for a while, but it wouldn't suprise me if it cracks and heads down to $42 ish
Yes, I have been waiting for consolidation back at the breakout level to buy also. Perfect example right now, MCR. I've got my eyes firmly locked on this one.
This is definately an extremelly hard chart to read for me. I also expect some type of consolidation, either around the previous high, or could retrace all the way to around $42 where it should find strong support. However, would have to see some capitulation of the XMJ which is the absolute bull of the XAO!
Yeh, long-term MAs are something I do not use in my trading, despite having read several strategies using them.
I am looking for a consolidation around the 3.40 area on MCR, and a micro pattern to trade.
Of course, none may ever come about and it may head right back down (looking the case at the moment), it was just an example, KZL is in a similar situation now, just approaching resistance, however these type of consolidations are probably more probable when at all-time highs anyways.
We have digressed, back to BHP.
US looking good accross most segments tonight (except energy) on expected CPI news (which must have been better than expectations) and decent oil inventories. Perhaps a bad sign for BHP.
It tanked at the end (with heavy volume selling) and that is exactly what I expected... always happens on the options expiration before day... as for MAs, you would be very surprised how a stock acts around them for support or as resistance
Yeh, I have watched it numerous times, however it just does not fit my trading plan or set-ups. I have quiet a few and am testing them all against eachother. Accumulation/support and gap plays are seeing by far the best results for me.
What tanked as expected at the end on options expiration (BHP)? As far as seasonality, options expiration is generally a positive time for the market, historically, moving up more than down in those weeks.
I saw a study from Merrill Lynch over the period 1985-2000 which stated the stockmarket has outperformed in expiration weeks over that period. One of the reasons suggested is the generally bearish stance of options traders. Their unwinding of positions causes prices to rise. Generally works better when there is heavy put buying in relation to call buying. Of course, even more powerful in tripple witching weeks.
Yeh, though generally up.
Far better trades out there than BHP currently which looks indicisive to me.
Infact, a very good one came up today!
I am a bit confused, china is buying a stake in BHP,
http://www.bloomberg.com/apps/news?pid=20601081&sid=aWl6.WZPMc7M&refer=australia
Is the recent price hike because of this?
Actually I entered BHP at the right time ( 36.70) , now I want a good exit. I will reenter when it will breath a little. Some news sources are saying chinese will buy it at around 53.00... So the question is what is a good exit. Hang in or lock in the profit. I hate decisions
Some news sources are saying chinese will buy it at around 53.00...
Do you have the link to that news ?
I believe this is just another speculation. The Chinese are not that stupid to tell the price they are willing to pay. This only makes the share price to shoot up.
I always say... don't be too greedy$50 is a great exit considering you bought a $36.... why risk the downside for an extra $3?
For me exits are absolutely quintessential, and will define how a trader does over the long-term.
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