Firstly, everything in TA should be simple. People seem to want to make it complicated. TA works because prices are not random, but correlated, i.e. one thing affects the next, affects the next, affects the next and so forth. So just keep things basic to try and best see the important relationships in order to predict price movements.
The main board for BHP is the ASX. I don’t know what’s traded in the US. I assume it’s those American Depository Receipt issues which are particular structures that I think have different dividend rules and whatever. But it’s a secondary market for BHP, which presumably follows the pricing on its home market, not leads it, and is adjusted for currency translation. If you’re going to analyse a stock, stick to its home market, don’t worry about how it’s traded elsewhere.
Secondly, when I said above “The key is that this is big picture Monthly charting. I don't apply ATH levels at Weekly or lower time frames“ and you then send me a Weekly chart, it makes me think that you’re mucking up at the back of the class and not paying attention.
What we’re doing here is placing the big boy price levels (of the ATH) on the big boys chart (the monthly) to look across the whole history of the stock and see if we can draw any conclusions from the primary movements.
Although I wasn’t intending for my BHP charting to be an educational piece, I was just trying to show the how the price was unfolding, I may as well get some value from your research efforts. So if you want to explore this particular TA quirk further, here’s your homework.
Come back with a stock or three stocks where the 50% of the All Time High level (50% ATH), the most important big daddy price level of them all, is influencing the price in a way that is tradeable. Apply the following filter:
ASX stocks only,
Monthly chart only,
Mid to large cap stocks (don’t bother with TA on those HC spec specials)
Place ATH prices levels (and ATR if you can) of 25%, 38.2%, 50%, 61.8%, 75% on the monthly chart. See what price is doing around the ATH50% level and what we can learn from it that might be tradeable. It might be bouncing of it, it might have broken through and be retracing, the retracement might have been disrupted by a trend-line or something else.
(20min delay)
