Instead of rising as hoped in August, BXB's price has drifted lower and fallen back below the overhead resistance downtrend line. In a downtrend and making lower troughs and peaks is not positive and the stock did fall marginally below my stop loss before recovering a little last week. The $10.25 stop loss was a level of support (more of a narrow band) which I hope will be the point the stock does recover from to build on last weeks 4% move up. That level is also a 50% retracement of the last significant peak and as such can usually be considered a strong support level.

Elliot Wave count with BXB is unclear and I'm hoping that the recent March high is not a failed Wave 5 (due to the Covid fall). If that is the case price could be expected to recover but perhaps not above $12. In that scenario, if price does rise, closing out the trade at the first appropriate time might be the best course of action - ie live to fight again another day!

BXB 9Oct2020

11 August 2020

BXB’s price reacts strongly to economic downturns with major retracements apparent in 2002 and 2008 (GFC when price fell 73%). Price has been travelling in a large rising price channel for over 30 years. Elliott Wave suggests price has possibly finished Wave 4 and is rising into Wave 5 which has the potential for price to return to the top channel boundary around $16. Price remains in a technical uptrend despite falling back a little recently. From the March low (following the Covid fall) price has been making a pennant pattern which has a target of $14.47 Should price break above $12.24 there is an argument this would be a resistance break pattern with a target of $14.16 These targets are still well short of the large long-term price channel. The probability of a rise out of the pattern is much more likely than a fall, but that doesn’t mean it is guaranteed.

The time to buy would be when price breaks and closes above the pennant upper boundary with some volume.

BXB 11 Aug 2020 large view

BXB 11 Aug 2020

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Robert Norman

Phone: 0428 346 951
Email: robert@sharecharting.com.au

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