By Relmor Demitrius
As oil has now broken over the $87 a barrel area, I see a lagging move coming with some oil stocks. One in particular is showing signs of a finishing consolidation pattern and a breakout possible. BP (NYSE:BP) has experienced a daily MACD bullish crossover on the signal and moving average lines and appears poised to now test its 200 day moving average.
If you look at the chart you can see the approaching 200 day moving average is right now at $44.72. The chart has a few gaps right now but I would expect those to fill later. Its best when trading a move near its current top in an underlying metric, in this case the price of oil, to find a stock that hasn’t moved up as well as others have. Of course with this company spending billions on clean up and recovery from the Gulf spill this is one equity that might have been ignored on this oil move till now.
With a strong market close last week, oil holding near $87 and BP having some technically indicators going their way this week, I see some strength in this stock for now. I expect soon a test of that 200 day moving average, but lower might still be in the cards initially. I expect any pullback this stock has this week to be bought into aggressively. The stock has still been hit hard market cap wise since the spill and is still throwing off that bad press to this day.
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Disclosure: No Position BP
Thank you so much for your articles. I am a new trader and have invested in BP hoping it will go up at least to 45-46. I’ve learned from this information to perhaps hang in there, better things are going to come. At least I am praying so..