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Equity Update: BHP – Head and Shoulders above the Rest?

Posted by nexvucapital on April 8, 2013

We noticed a repeating pattern in one of our old favourites that deserves some comment. The monthly chart on BHP reveals two distinct Head and Shoulders (H&S) patterns and what appears to be a third in the making. The first is an Inverse H&S bottom that was built during the commodity bottom in Q4 2008. This was followed by a classic H&S top in Q1 2011. Now we see the emergence of what appears to be another Inverse H&S bottom pattern building at what looks like another commodity bottom. Why do we think this is a bottom – well today Bloomberg reported that Hedge Fund exposure to commodities is currently at its lowest levels since October 2008…and we will let you decide if that is coincidental.

BHP - Monthly April 8 2013

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