BP

BP, British Petroleum

Hamilton

Have not even looked at this one for a while. The former CEO’s comments yesterday reminded me. Last time, on July 16th I opined that the stock should not trade below $34 and that a reasonable target would be about $47. We got to $44, give or take, and I would sell here and just watch what happens next. This stock could be in a new bull market but unfortunately the action from the lows looks a lot more corrective than impulsive. Here is the chart.

BP nov 2010

Apart from the less than promising EW pattern, the RSI and MACD are turning down.

See also May 27th blog!

BP , again – where might it go?

Hamilton

BP july 2010

Ultimately BP could go to the $60 level being the top in an A-B-C multiyear correction. We will see but if this does happen it will not be in the next few weeks or months. So what is the shorter term target? Too many things are going right at this time. Exxon  takeover, Arab capital injection, blame spreading,and dozens of other considerations that mean very little. So why not depend on the chart?  $47 is about 62% retracement of the C leg. It also corresponds with wave 4 of 3, a common event. An island of sorts has been left behind by the two gaps on the way down and up, I do not expect the stock to enter this area again, so a drop below $34 is now unlikely. So far the rise from the lows has occurred in a very narrow channel suggesting that it is one single wave! Corrections are invariable a-b-c structures, so if this was a correction which I very much doubt, the stock would first go down only to rise again later. If it is a new bull market, which I prefer to think it is, the first leg up should be 5 waves which probable means that we have one more to go which could easily add another $6/7 to get us to $47 in the first round. There the stock should be sold ( and perhaps bought back  $10 lower).

BP , again.

Hamilton

bp june 2010

We stick with the view that BP should get a recent bounce, either because the Arabs are going to inject capital, or at last they will make progress, or, and this is not that unreasonable, they are successful at deflecting some of the culpability on their partners in crime. In any case the symmetry of they down legs that suggests we should get a decent bounce soon. It is also down a near perfect 62% over the last two years. Stay with it.

By the way I mentioned Phillip Morris (MO) as an example of a stock that should have ended life given the sums of money that the courts figured they should pay the complicit governments for causing so much damage to the health of mankind and, by extension to the costs of medicine and healthcare. Incidentally, the latest take on this is that smoking actually diminishes these costs as people move on at an earlier date and avoid the most expenses years of their lives by signing off early. Look at this chart and wonder how MO was burdened by the damages it was assessed.

MO, june 2010