Baker Hughes Stock to Become More Active (BHI) [TECHNICAL ANALYSIS]

Baker Hughes stock might not be in the watchlist of traders looking to buy stocks; but now it should. After 5 months of inactivity, Baker Hughes share price has established a very strong support level and with the new state-of-the-art Blue OrcaTM vessel the Company announced last week, a new uptrend may emerge. Traders, who use technical analysis to predict stock price movements, will point out many reversal patterns in the daily chart and also in the weekly chart. Yet BHI stock price has failed to escape the sideways channel fluctuating around $50 per share. Perhaps it’s about time for Baker Hughes stock to retest the resistance level at $80.


MACD divergence and a declining ATR indicate an imminent strong move of BHI stock price. Technical analysis in the daily stock chart shows multiple price rejections at $45 or a bit higher during the past few months. At the same time MACD divergence suggests a likely reversal after the 2-month downtrend in 2011, while the declining Average True Range (ATR) means a long period of inactivity and a possible sudden burst of Baker Hughes share price. Although BHI stock price can either break out below the support level or above the resistance level of the consolidating channel, MACD divergence and the 3-year uptrend in the monthly chart increase the likelihood of an uptrend rather than a downtrend. Besides, should a sudden drop occur, the stop loss will keep traders safe from a big loss. Friday’s candlestick completed a bullish reversal formation.

BHI stock price to retest $80 resistance level

No one can say for sure whether a likely uptrend’s resume will force BHI stock price to rise up to $80 or not. Granted though the $80 price level is a crucial level where resistance is expected during a probable uptrend. That is why stock traders should better exit their position or sell some of their shares at that point, in order to secure profits and convert the rest of their position into a risk-free trade by moving the stop loss higher than the breakeven point. Until then however, investors and traders must be patient and let Baker Hughes stock price prove the prediction correct.