I think Bil is a great stock to hold in any portfolio and really, at any price (within reason of course). Everything is subjective to the time you are trading. Are you willing to miss out on x% profit now because you have missed out on 20% profit previously? I agree the amount a stock has moved up/down must be considered in your trading strategy before buying, but it should not be a stopper for you. Bil charts are showing a consolidation sideways. see Bil's weekly chart. The MACD's are not showing divergence - this is a good sign, as it means the recent sideways move has an underlying buying depth. However, a conflicting signal is that shown by the RSI which shows divergence on both the weekly and daily RSI's. This makes the RSI signal more valid, but can I put one stipulation on this indicator. The RSI's strength as a signal is for non-trending or slightly trending stocks, not one that has a strong uptrend (like Bil). I personally don't put too much emphasis on oscillators when there is a trending stock. The Chande Oscillator does not support the RSI indicator. Looking at the GMMA's, we can see a very strong long term group of EMA's, supported by a strong short term group. As this is on the weekly charts, these time periods are blown out substantially, and we should look at the daily chart for a more indicative view of the GMMA's. Using the theory swing traders use that the price of a stock will always try and return to an equilibrium, we can see that BHP can move quite substantially before it breaks any long term uptrend. Worst case scenario, Bil would drop to the early 230's before the rubber band pulls it back up. Naturally, using this technique, there is an assumption all else remains equal. Of course, when a stock does approach equilibrium, someone will see it as a good buy or sell price, and the stock moves back away from equilibrium. And thus, we have our bizarre price movements in stocks. Remmember Bil screamed up 45% post sub-prime, we are in a mini sub-prime shake out so watch Bil run up. All counter views gladly taken.
Billiton is great for the long term but it has now broken the neckline of the short term head & shoulders pattern. We may see a nice bounce in the next day or two (the return move) because it is fairly oversold. In the next weeks will however (omo) move down to support at 212.65 (also the height of the pattern projected down from the neckline break).
4% up on FTSE, One sign of weakness is Bil's inability to break its previous highs of mid October. It has had three or four goes at getting up there, but on each occasion, the sellers take their profits. This should be taken as an early warning sign, but wait for a move outside the channel. =4% less noise from certain f-ites.
Short term trend is down. If you can't see that then maybe you're the slow learner around here. Read Wena's reply, because as far as I'm concerned he/she is spot on. If you get too caught up in the day to day antics of this share then you're missing the bigger picture. 2% up one day 3% down the next. Who cares when the short term trend favours your position, and for the next few days that is short? The reversal of this trend which is imminent will be easy enough to spot which will give ample time to get out.
Project Director, just a thought which might have no foundation at all - you don't think the Asian Sovereign funds may be trying to drive the price down to then cheaply acquire a major stake and thereby ensure that they can control the future price of the resources their countries so desperately require?