Yesterday’s 5% rally in BHP left a many investors wondering what was driving the shares on a quiet Monday session.
The main reason was a report that Elliott Advisors suggested the company could unlock shareholder value by spinning off US Petroleum and collapse of the LTD and PLC shareholdings.
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The idea is that the Elliott plan would accelerate the release of value and franking credits. Of course, the $6.00 rally in Crude Oil since March 27th has also been a boost to BHP shares.
Our ALGO engine generated a buy signal for BHP on March 13th at $23.65.
We remain cautious of the extended valuation of equities, in general, and suggest placing a stop in the $24.40 level on long positions.
Chart BHP
