BP Watch

"BP Jumps", one headline said. The headline should read, "BP falls through key support; no end in sight".

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
BP $32.16

There was a jump, but a sorry jump it is, of the sort that's akin to the "capping" of the oil flow in the Gulf. Although trading higher than Wednesday's close, (BP) nears the close with lower volume and a net trading range of about one-tenth of one percent.

Indeed, BP yesterday broke below the $35 support level, a level that has been tested twice as support and once as resistance in the past 20 years.

This is not a stock moving up, or even thinking of doing so. Someday, when the well is capped and the costs are known, maybe. But not yet.

That's the negative take. However, the macd for today has moved up a bit toward the zero line, and the fast stochastic crossed out of oversold territory back into the neutral zone, a near-term bullish sign.

BP is a stock where to an extent, normal analysis breaks down. It has been buffeted by the Great-Grandmother of All News Surprises, and granny is still on the prowl. So I think the best an analyst can do is play a caution game: Multiple confirmations from the tech signals, a rise on significantly higher volume, a cross above the moving average (50-day or 200-day for the cautious, 20-day for the free spirits), and a braekout above near-term price resistance.

Reversal Levels

• $45.57, +41.7%
• $39.41, +22.5%
• $32.16 <== You are here.
• $29, -9.8%

There have been no multiple tests to the upside, such single reversals at widely spaced levels. Nor to the downside. The weekly chart is instructive: A 24% decline (so far this week) on volume that is 63% higher than the prior week, which also saw a decline on rising volume.

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Disclaimer

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

Abbreviations:

• psar - Parabolic Stop and Reverse
• adx - Average Directional Index
• pps - Person's Proprietary Signal
• ma20 - 20-day moving average
• macd - Moving Average Convergence-Divergence
• sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.