Short term
Trade view / 19 September 2016 at 5:10 GMT

Bounce in Boliden looking for a break higher


Swedish mining and metal processing company Boliden (BOL:xome) has had a good run since January this year. Thus far managing an almost 100% appreciation in value off those lows. On August 15 the stock put in its current peak, aligning in time and price, and warning us that the uptrend would be put to the test.

Since August 15 BOL:xome has retraced SEK 196 to SEK 175. At the time of the low on September 12 we have seen a bullish divergence on the daily Stochastic indicator, which is indicative of at least a first cycle lower has seen a completion.

As the longer term prospects are yet to be hinted at by the market, by either managing to print new highs above SEK 197 or new lows below SEK 175, the current bounce has room to continue for a while longer. Key resistance is now found at SEK 183, if this stock can manage to break above this level, SEK 190 should be next. 

Management and risk description

The plan is to see if we can get a break above SEK 183. If we do this is a signal for the current bounce to continue to SEK 190. The stop could initially be placed at SEK 179, which is the low of the bullish September 15 candle.

As always with breakout trades, the risk to this setup is a quick break higher which is then reversed lower quickly only to take out our stop. A break below SEK 175 would be indicative of a move lower to SEK 169 and SEK 157.


Entry: buy a break above SEK 183.

Stop: SEK 179.

Target: SEK 190.

Time horizon: about one week.

Boliden daily chart
Boliden daily chart
Boliden daily development chart
Boliden daily development chart
Source: all charts Saxo Trader. Create your own charts with SaxoTrader; click here to learn more 

– Edited by Gayle Bryant

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Non-independent investment research disclaimer applies. Read more
21 September
Johan Berntorp Johan Berntorp
One can use a potentially bullish open to square this position for a short term profit and await further action and see if we can break SEK191.
21 September
Johan Berntorp Johan Berntorp
As an alternative move the stop to SEK 183 and wait and see if we can hit SEK 191.


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