BHP Stock Tests Key 49.50 Resistance After 3.42% June Rally On High Volume

Candlestick Theory
BHP Group's recent price action shows notable candlestick patterns. The July 1 session formed a bullish closing candle at $48.67, recovering from an intraday low of $48.05 after preceding sessions established support near $47.50. A key resistance zone emerges around $49.00–$49.50, validated by multiple rejections in late June. Conversely, support is firm at $47.70–$48.00, aligning with the June 26 hammer candle that reversed a downtrend on high volume. The current consolidation near $48.50 suggests indecision, but the absence of bearish reversal patterns (e.g., shooting stars) near support may indicate accumulation.
Moving Average Theory
The 50-day SMA ($49.20) recently crossed below the 100-day SMA ($49.80), signaling deteriorating medium-term momentum. Current price ($48.67) trades below all key SMAs (50/100/200-day), confirming a bearish intermediate trend. However, the 200-day SMA ($51.50) maintains a positive slope, providing longer-term structural support. A decisive close above the 50-day SMA could signal trend reversal potential, but persistent resistance near the 100-day SMA reinforces overhead supply.
MACD & KDJ Indicators
MACD (12,26,9) shows a bearish histogram with the signal line above MACD, though the negative momentum is decelerating. KDJ readings (K: 42, D: 38, J: 50) exited oversold territory (<30 on June 25) but remain neutral, lacking strong directional conviction. Divergence occurred on June 20–26 as price made lower lows while KDJ formed higher lows, foreshadowing the recent rebound. Neither oscillator currently flags overbought conditions, leaving room for upside if bullish momentum accelerates.
Bollinger Bands
Bollinger Bands (20-day, 2σ) contracted sharply in late June (bandwidth -25% vs. mid-May), indicating suppressed volatility preceding the July 1 breakout attempt. Price currently tests the middle band ($48.40), with upper/lower bands at $50.20/$46.60. The expansion from the June 30 squeeze aligns with the bullish engulfing candle on June 26. Sustained trade above $48.40 would suggest renewed bullish momentum targeting the upper band.
Volume-Price Relationship
Volume analysis reveals critical confirmations: The June 26 rally (3.42% gain) occurred on 4.23M shares—the highest volume in three months—validating bullish conviction. Conversely, the June 20 sell-off (-3.11%) saw elevated volume (5.84M shares), confirming distribution. Recent up days (July 1, June 27) show moderately rising volume, supporting near-term stabilization. However, the absence of climactic volume during July’s rally suggests cautious participation.
Relative Strength Index (RSI)
The 14-day RSI (47.5) rebounded from oversold territory (28.6 on June 25) but remains below neutral (50), reflecting residual bearish pressure. RSI divergence aligned with price on June 20–26 (higher lows vs. lower price lows), providing early reversal signals. Current readings lack overbought risks but require a break above 55 to signal strengthening momentum. False signals from late May (overbought RSI preceding consolidation) warrant confirmation from other indicators.
Fibonacci Retracement
Applying Fibonacci to the April 9 peak ($59.54) and June 25 trough ($46.74) shows the 61.8% retracement level ($49.90) acting as robust resistance. Recent rallies stalled near the 50% level ($48.85), aligning with the July 1 high ($48.88). Confluence exists at the 38.2% level ($48.05), coinciding with the July 1 low and 20-day Bollinger Middle Band. A close above $49.90 (61.8%) would target $51.30 (78.6%), while failure at $48.05 may retest the June low.
Confluence & Divergence Summary
Strong confluence exists at $48.00–$48.20 (July 1 low, Bollinger middle band, Fibonacci 38.2%), making it critical support. Resistance converges at $49.50 (100-day SMA, June swing high). Bullish divergences (MACD/RSI/KDJ vs. price in late June) supported the current rebound, but weakening volume during the recovery phase creates mild bearish divergence. A close above $49.50 with volume expansion would confirm bullish reversals across oscillators and break key Fibonacci levels, while failure to hold $48.00 risks invalidating recovery signals.