BHP 27th & 28th of June 2011

27th of June was a real slow day with the SPI down about 45 points for the day and the market grinded sideways for the most of the day in a tight range. BHP which was showing good signs of divergence and building up to break to the upside. Unfortunately I had to go out and missed the entry signal. What is my entry signal? The signal bar is a close above the double blue lines, the trigger bar is the next bar that breaks the high of the signal bar. Stop is placed at the low of the last minor swing low. Price target would be set to the blue line at 42.22 as the market was extremely sluggish, 15 points. In an active market the red line would be the target and with a more bullish market the green line would be max price target.

The next day with a positive lead from the USA BHP opens at near perfection at the green line at 42.74 which has a extreme high % for a reversal to happen.The chart started showing signs of negative divergence on the RSI (not shown) and the momentum indicator gave a signal to the down side. BHP broke down and provided a great short trade for the rest of the day. Points 32, secondary trade Points 23