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Today we are looking at applying a Bull Call on BHP Group Ltd

Analysis:

BHP is currently trading at $51.78.

BHP has been trading in an uptrend since the covid crash in March last year. Recently it pulled back from its recent highs and stalled at both a key level of support and the accelerated uptrend line which comes in at around $51.50. Some of the pull back is likely attributed to the falls we have seen in commodities, but in particular iron ore.

BHP reports on the 17th and often we see a rally leading into it. The pull back to these levels presents some room to rally. There are a few ways this can be traded in such a short period. We could simply purchase a Call option and profit with a quick snap up. Alternatively, we could hedge for time and do a shorter dated Bull Call spread, so that if BHP tracks sideward up to the report, we can close the trade for a marginal profit (after costs).

Today did not provide the best entry signal for a bullish trade, but this is one to keep an eye on in the coming days.

If you would like to learn how and when to use this strategy, and other strategies like it, then please contact us here at TradersCircle on 03 8080 5788. Alternately, you can access some free resources off our website which runs through advanced strategies.