Currently MM’s major exposure to the classic Resources Sector is through heavyweight BHP Group (BHP) but we anticipate moving back to a large overweight stance at some stage in 2021, hence today’s report after the FOMC meeting and subsequent rally in the $US. Like much of the sector BHP looks vulnerable to a short-term pullback:
- The ideal technical target for BHP on the downside is ~$44, or 8% lower.
- MM has mentioned OZ Minerals (OZL) a number of times recently including comprehensively in a podcast last week, we like the quality copper miner closer to $20, or around 10% lower.
NB In all likelihood if we are correct most of the sector will bottom out together over a 24-48 hour period.
