At the time of writing, shares of BHP Billiton Ltd [ASX:BHP] are down by 2.51%, to $31.87 per share.
Why did BHP Billiton shares do this?
I’m surprised our market isn’t trading even lower today. The US Dow Jones Industrials Index dropped 2.21%, or 551.8 points, to end at 24,465.64 overnight. The Aussie market is holding up relatively well, considering…and so is BHP Billiton’s share price.
But, I don’t think the current market correction is over. That’s probably not good for BHP Billiton’s share price in the short-term, either.
What now for BHP Billiton?
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 a good chance it moves lower in the short-term, which is why BHP Billiton’s share price could revisit old lows:
Reviewing the tea leaves, I believe $28 is the major target by traders. It’s worth noting the share price is holding up and probably won’t get there overnight, mind you. That’s possibly because of the iron ore price ― a large contributor to BHP Billiton’s earnings:
The iron ore price has marched higher over the past two months, despite BHP Billiton’s share price falling lower with the overall market. That said, while it might pull back slightly in the weeks ahead, iron ore is booming at the moment. In that case, given iron ore is a large source of BHP Billiton’s revenue, the share price should be supported.
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 its good news the iron ore price is surging, as it’s supporting the company’s share price.
Resources Analyst, Markets & Money
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