Sometimes, knowing which issues to trade is half the battle -- and in BHP Billiton's (BBL) case, it's a losing one.
While the diversified miner has potential upside in its shares right now, minuscule upside gain potential is telling traders to hold off on this one. Right now, shares are trading upward between the moving averages. But with little space between shares and the stronger 200-day moving average right now, there's a lot more downside risk than there is upside potential. If you want to take a trade on BHP Billiton, I'd recommend waiting for shares to bounce off of the 200-day and go short, or in the case of a break above the 200, wait for confirmation in the form of support at the 200-day.
In the short term, at least, there are too many higher-potential trades out there to justify taking on a sniping trade like this stock.
Who Owns BHP Billiton?
To see this week's trades in action, check out the High Volume Technicals portfolio on Stockpickr.-- Written by Jonas Elmerraji in Baltimore.
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