Only just got a good chance to look hard at this now. The little man (2 year old) and I have been playing drums for the last few hours and he bombed out around 8:15 so I'm in a really good mood now to do this
That and I've primed myself with a couple of glasses of red
I can tell you're new to this. Not to say that your analysis is wrong because I see what you're saying TA wise and I think you did a good job there. But I can tell you're just overlaying the FA onto the chart, without reading the TA on its own. Don't ever do that if you're going to put money down. You'll lose, trust me. Its fine while you're learning but that's it. Go do the exercise again with a random company from any other stock exchange where not even the name of the company gives you an idea what they do. Put a bet on in your mind of the direction it will go, and check on it again in a month.
Knowing you've been working night shift, and you put that post up at midnight EST I'll take a punt to say you were on a mine in WA somewhere, and given your knowledge and interest on BHP that you are in fact on a BHP mine somewhere in WA. Lots of red dust in the Pilbarra? All conjecture of course
Now the problem I always ran into with FA is that because I thought I had some inside knowledge that it weighed too heavily on the TA that I was looking at and I ignored what I was looking at on the charts because I thought the FA would run over it. Let me give you the tip, until you're at the very top, you don't have inside info. Even if you're a shift supervisor or middle manager in the Death Star (or is that a Rio term?) Don't disregard you're FA, but only give it the weight it is worth. The charts tell you EVERYTHING, but its up to you to get the interpretation right. Make sure both the FA and TA line up.
I like your overlay of the 200 bollis, Notice how the PA always plays in them? Uncanny. I might start using them again for myself every now and then. They actually do a good job, but given you didn't put many support and resistance lines on the chart, I'll say that you suffered from a bit of FA and overlay overload. S/R and trend lines are the strongest pieces of TA skills you'll get and you only put two on there. And given you only put them at the pointy end of the PA I think that backs me up. Everything else revolves around S/R and trend lines IMHO. Like kicking in footy; if you can't do that properly, it doesn't matter how well you can ruck or tackle, you're useless. Make sure your basic setup is as simple as possible. I used to use heaps over overlay and indicators and MAs, now I just use candle reading on the PA and volume to give me that info, along with those on my setup I've described above. I'll get onto volume spikes and candles in some later posts. Nag me if I forget please.
Now I put a couple of things over the top of your chart with my
sooper dooper purple pen.
View attachment 1096315
The S/R line there is very important. Knowing after the fact that the PA continued up doesnt mean that at the time you knew it would. It represents a line that may become important in the future given it was bounced off 3 times. It may come back and hit it again if BHP turns around. The same as all the rest of your S/R lines.
Now look at the first curve I drew on the volume. Maybe its just my eyes after a few glass of red, but I see a trend of the volume curving with the chart on its move down and up again and then a spike (The second volume curve I drew) as it reaches the peak. Those things are hard to see and its takes a few years of bleary eyes to spot them. The volume is so much more helpful than you'll believe, but the problem is its harder to spot these things on blue chips and 100x harder on spekkies. Keeping on the volume, notice that little downtrend I drew in. It indicated the little pop at the end there. Whenever volume dries up, it forces a move because if there is a movement in motion and people stop selling/buying it force buyers/sellers to force their hands in the direction of the trend line if they want to get on board for the trends ultimate destination. There is another slight downtrend I didn't put in. Can you spot it? The other thing about volume that I have noticed is that it is a front runner for any move. I'll put a post up on that too. Again, nag me if I forget.
The circles I drew in are little pops of the 200MA that would have been handy to spot at the time. The bigger a company, the more important the 200MA becomes, and on companies the size of BHP it even pays to use a 500MA to analyse their direction. Smaller companies tend to ignore the 200MA so a 50MA or 150MA may be better while you're starting.
BHP is a raw commodity producer and given that, it is better you understand things about macro economic trends. Miners are the absolute starting point of any trend in society. Electric cars for example need copper. And BHP make copper. So if you think that electric cars are going to be a big thing in the future, it would pay to invest with the trend.
Anything else you would like me to add?
