BHP Group Gains 4.09% as Four-Day Rally Pushes 6.81% Amid Bullish Technical Signals

BHP Group (BHP) has rallied 4.09% on the most recent session, extending its upward momentum for four consecutive days with a cumulative gain of 6.81%. This short-term strength suggests potential bullish continuation, but a deeper analysis is required to assess the sustainability of this move and identify key technical levels for positioning. Below is a structured evaluation using multiple analytical frameworks.

Candlestick Theory

The recent price action for BHP Group exhibits a strong uptrend, characterized by higher highs and higher lows over the past four sessions. A notable pattern is the Bullish Engulfing formation on 2025-09-24, where the body of the candle fully engulfs the previous bearish candle, signaling a potential reversal in sentiment. Key support levels are identified at $53.15 (a recent trough on 2025-09-22) and $52.14 (a prior consolidation level in early September). Resistance is currently at $55.89 (a peak from mid-September) and $56.02 (a prior high from early September). A break above $55.89 could target the psychological level of $57.00, while a pullback to $53.15 may test the integrity of the bullish trend.

Moving Average Theory

The 50-day moving average (DMA) for BHP Group stands at approximately $53.20, while the 100-day DMA is at $52.50, and the 200-day DMA is at $51.80. This "golden cross" configuration, where short-term MAs are above longer-term ones, confirms a bullish medium-term trend. The 50-day DMA is currently acting as dynamic support, and a close above the 100-day DMA ($52.50) would reinforce the upward bias. However, a drop below the 200-day DMA could trigger a reevaluation of the trend.

MACD & KDJ Indicators

The MACD histogram has turned positive in the last two sessions, with the MACD line crossing above the signal line, indicating strengthening bullish momentum. The KDJ (Stochastic) oscillator shows the %K line at 78 and %D at 65, suggesting the stock is approaching overbought territory. While this may hint at potential near-term exhaustion, a divergence between the RSI and KDJ (discussed below) could signal a false overbought condition.

Bollinger Bands

Volatility has expanded recently, with the bands widening from a narrow contraction in early September. BHP Group’s price is currently trading near the upper band at $55.69, indicating overbought conditions. A break above the upper band could extend the rally, but a retest of the lower band at $53.20 would confirm the volatility regime.

Volume-Price Relationship

Trading volume has surged on the recent rally, with the most recent session recording 4.89 million shares traded, a 20% increase from the previous day. This volume expansion validates the bullish price action and suggests strong institutional participation. However, a divergence in volume (e.g., rising prices with declining volume) during the next pullback could signal waning momentum.

Relative Strength Index (RSI)

The 14-day RSI for BHP Group is at 68, approaching overbought territory. While this does not confirm a sell signal, it warrants caution. A close above 70 would reinforce overbought conditions, but a divergence between RSI and price (e.g., higher highs in price without RSI confirmation) may indicate a potential reversal. Historical context shows the RSI often retraces from 70–80 to 60–65 during healthy uptrends, suggesting this rally could consolidate before resuming.

Fibonacci Retracement

Applying Fibonacci levels to the recent downtrend from $56.02 (2025-09-03) to $52.14 (2025-09-18), key retracement levels are at $54.07 (38.2%), $53.29 (50%), and $52.51 (61.8%). The current price of $55.69 is above the 38.2% retracement level, suggesting a potential target for a pullback to the 50% level at $53.29. A break above $56.02 would invalidate the Fibonacci bearish scenario.

Backtest Hypothesis

Integrating the RSI-based backtest strategy described, the historical performance of selling BHP Group when RSI >70 from 2022–2025 reveals a 46% win rate across 3-day, 10-day, and 30-day horizons, with average returns of -0.65% to -2.99%. This aligns with the current RSI near overbought territory (68) but contradicts the bullish momentum from candlestick and moving average analysis. The confluence between strong price action and overbought RSI suggests a high-probability consolidation phase rather than an immediate reversal. However, the backtest results caution against relying solely on RSI for short-term exits, as divergences with volume and KDJ may reduce reliability.