BP PLC (BP) was reviewed recently, and I wrote that "Continue to hold longs in BP and consider adding to that position on strength above $48 looking for gains to $57 or higher in the months ahead." BP has been trading sideways the back half of July so the question is whether our positive view is still intact? The short answer is yes, but let's review the charts and indicators.
In this daily bar chart of BP, below, we can see that prices have been finding buying support around $44 as that level has held in May, June and so far in July. The slope of the 50-day moving average line has turned bearish but it is also not far above the market. The 200-day moving average line is still bullish and intersects down around $42. The daily On-Balance-Volume (OBV) line has been neutral the past two months as buyers and sellers of BP seem to be in balance. The Moving Average Convergence Divergence (MACD) oscillator has narrowed and is poised for a crossover and cover shorts buy signal.
In this weekly bar chart of BP, below, we can see that prices are still above the rising 40-week moving average line. The weekly OBV line shows a small dip this month and the MACD oscillator has crossed to a take profits mode on this longer time frame.
In this Point and Figure chart of BP, below, we can see that support at $44.38 was broken and a downside price target of $41.31 is now projected. Sometimes downside breaks lack follow-through selling and that is what I think could happen with BP.
Bottom line: I favor the long side of BP and still want to add to longs on strength.