So you're saying that BHP is fundamentally unsound or at least, less fundamentally secure than they would have us believe? Yet since publishing its financials 8 weeks ago, it's moved form 55 to 85. (In fact only today looking a little toppy [very toppy actually] from a technical perspective.)
It's certainly been technically tradable since late September when it broke that major level at 70, but from a fundamental viewpoint (which you have) what is your current position and view?
Bramble,
BHP, fundamentally, is overvalued.
That the price has continued to rise is common, especially in a bull phase.
That the price has far exceeded the underlying "intrinsic" values, places the stock firmly into the Quant and/or Technical camps with regards to current trading [unless selling a long position held from a previous cycle]
And therein lies the difference. Should BHP enter a bear market for [it's] stock, then on the way down there will be numerous "technical" support levels that will not hold, they may provide a "bounce", but, there will be no Fundamental buying support, thus they will fail.
Even with Fundamental buying, a support level may be broken, ultimately however the continued buying [and holding] through declines provide the Fundamental support base that will generate the next bull leg.
Resistance however is different, very few Fundamental based Funds will "Sell Short".
Chanos' Fund is one example of a Fundamentally based "Short Seller" who base their positions on overvaluations and or aggressive accounting.
Thus, in Bull markets, there is far less Fundamental based selling, than Fundamental based buying in Bear Markets.
Therefore, my opinion, on a Fundamental analysis is that BHP is hugely overvalued. I would not however "Short" BHP based on this analysis. But I certainly wouldn't be purchasing either.
jog on
d998