Haspete, I think your chart is missing the 05 data. But never...

Haspete, I think your chart is missing the 05 data. But never mind. I agree charting has its uses, and thanks for the chart and analysis, but understanding the fundamentals might be more useful for understanding and predicting both the short term and long term movements of companies like bhp. Here is how I see it.

It has been revealed that the entire 2007 supply of copper production from Codelco (worlds biggest copper producer) has been bought by China and others with advanced orders and at premium prices. So China is both selling their own entire copper production on the LME and buying (ordering) copper 12mths in advance at premium prices directly from resource companies to secure their supply. I guess Chinese wire and pipe manufacturers will just have to go cold turkey for a while longer in the name of the country. So what are we to make of this sort of thing?

IMO the resource needs of countries like China and India, plus everyone else, will continue to see resource companies making record profits. I also reckon instos know this and are net long term buyers of resource stocks. But every buyer, including the big guys, likes a bargain. So expect more over supply rumors, down ramping, shakeouts, bounces, etc. Just part of market life now.

IMO this sort of behaviour is more a product of the large amount of CFDs and MLs in the market than anything else. So shakeouts work well for the big guys and not so well for the small guy. But if you know the big picture and don't let yourself get over committed and phased by the shakeouts you will win big time on resources if you can play them right.

I'm not sure if we are in for another shakeout. To me the intraday chart does not look like this is occurring. I think shakeouts look more like a saw tooth pattern with large red candles and short green candles. This looks to me more like profit taking. Could be a buy opportunity. hard to say.