At the time of writing, shares of BHP Billiton Ltd [ASX:BHP] are down by 1.92%, to $31.22 per share.
Why did BHP Billiton Ltd shares do this?
BHP Billiton is considered a leading company and tends to move with the overall market. That makes sense. The ASX 200 Index is trading slightly lower today, down 23.4 points to 5,645 points:
I’m surprised our market isn’t trading even lower today. The US Dow Jones Industrials Index dropped 3.10%, or 799.36 points, to end at 25,027 overnight. The Aussie market is holding up relatively well, considering. So is BHP Billiton’s share price. But I don’t think the current market correction is over. The above chart seems like cracking lower. That’s probably not good for BHP Billiton’s share price in the short term.
What now for BHP Billiton Ltd?
The ASX 200 has been in freefall towards 5,600 ― a price target that dates back to the July 2016 high point. I suspect the market might hold up around this level. But there’s always a chance it will move lower. If that happens, we could see 5,000 points. That’s why BHP Billiton’s share price could revisit old lows:
Reviewing the tea leaves, I believe $28 is the major target for traders. It’s worth noting the share price is holding up and probably won’t get there overnight. It really depends on the overall market.
That said, the iron ore price ― a large contributor to BHP Billiton’s earnings ― isn’t looking good either:
The iron ore price dropped sharply late last month. BHP Billiton’s share price held up relatively well, considering. That said, while it might bounce slightly in the weeks ahead, iron ore is still holding up at the moment. In that case, given iron ore is a large source of BHP Billiton’s revenue, the share price could be supported even if the market drops lower.
The bottom line: BHP Billiton looks like it could hit $28 per share. The company’s future is mainly dependent on the overall market today, rather than the iron ore price. But, given the fact that it’s holding up, the iron ore price could offer some support for the company’s share price.
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