One of few stocks that managed to standout from all the selling today was Bluescope Steel Limited (BSL). The above chart shows a very strong reversal today, with the stock trading gradually higher from the very commencement of trading. Bluescope Steel opened at $1.865 and rose steadily throughout the day, finishing just off the day?s of $2.03, to close at $2 and managing a 7.8% gain.
Friday?s candle was the actual buy signal as it shows a Bullish Inverted Hammer candle pattern.
It?s funny how sometimes charts can predict events before anything else can, and the market seems to have reacted strongly here. Whilst the terrible earthquake and tsunami that hit Japan has affected almost every other stock listed on the ASX today, Bluescope was bought up instead.
The market seems to be factoring in the rebuilding efforts that will be taking place in both New Zealand and Japan.
On Thursday the company made an announcement regarding a re-structure of their business as well as key management changes. The reaction from the market on Thursday was to sell the stock! Perhaps this announcement contributed to the rebound as investors were given time to digest the news.
The downward trend now appears to be broken, and higher prices should continue in the near term. This stock presented as an excellent trading opportunity for the CFD traders today, but it also could be a very good entry signal for the mid to longer term as well.
Falling iron ore prices could also be having a positive impact here.
BSL Price at posting:
$1.69 Sentiment: Buy Disclosure: Not Held
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