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BHP, with a significantly improved market capitalisation now at $127 billion, is following oil and iron ore higher. From a technical perspective, there are some very repetitive observations to be made in the BHP weekly chart.
The outside period (OP) is where the candle or bar makes a higher high and lower low than the previous week. The OP often shows up at major and minor price reversals. In the past two years, BHP has shown 13 OPs all signalling a reversal of price. As the OP shakes out both the short position trader and the long position trader, the following price action on a break of the high or low of the OP week usually provides a trading direction in the following weeks.
The current weekly chart shows an OP four weeks ago that has halted the current bullish trend at the established resistance level of $26.50. A retest of the lower channel line looks possible - this is also the current support level at $23.50. As the primary trend is up, this does not provide a short sell signal. Trend traders would be looking for an entry signal on any retracement.
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