BP Watch

The UK-headquartered oil giant BP P.L.C. (BP), hard pressed politically as it tries to control a particularly nasty oil leak in the Gulf of Mexico, is showing bull phase on the macd for the first time since April 23

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
BP $31.74

The phase switch comes on the eighth day of trading in a sideways range after an unrelenting decline as the full scope of the wellhead leak became apparent.


Today's trading so far is on far lower volume than yesterday with the stock moving down intraday.


Reversal Levels

• $45.57, +43.6%
• $34.46, +8.6%
• $33.00, +4.0%
• $31.74 <== You are here.
• $29.58, -6.8%
• $29.00, -8.6%

BP hit a swing high of $60.98 in mid-April before the offshore drilling mishap cut the price, eventually in half.

Longer term, the stock has been in decline since November 2007 -- the outset of the great finance collapse -- and since then has recorded a low, a lower high, and this month, a lower low: Downtrend Classic.

Normally, the macd trails other signals. In this case, it is leading. The parabolic sar has been in bear phase since April 22, and Person's Proprietary Signal moved to bear on April 26, did a two-day bull whipsaw in late May, and turned bearish again on June 1.

BP faces huge political and policy risks, so it's about a lot more than the chart. There is risk for traders from news surprises.

On the other hand, it is a very rich company: The $20 billion compensation fund negotiated with President Obama is about a quarter of three months' gross revenues. Since BP will transfer $5 billion a year into the fund over four years, it's certainly doable without destroying the company's finances.

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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.