Is BP Expecting a Break Out?

Published on Friday, 10 August 2012 09:04 Written by TradersHuddle Wire

New York, August 10th (TradersHuddle.com) - BP plc (NYSE:BP) closed the trading session at $42.22, near its 200 day moving average set at $42.62. BP's stock action is below this level, which makes the stock difficult to be bought, as it will face resistance as it approaches its 200 day moving average.

BP plc (NYSE:BP) is an oil and petrochemicals company. The integrated oil company explores for and produces oil and natural gas, refines, markets, and supplies petroleum products, generates solar energy, and manufactures and markets chemicals. BP was founded in 1889 and is headquartered in London, UK.

Latest price action range, defined by a peaks and troughs algorithm, placed calculated support at $39.50 and resistance at $42.62. Traders should closely monitor these levels, as they provide great reference points for the latest price action in BP.

If traders want to establish a position on BP, given that resistance could materialize as the stock approaches its 200 day moving average, a trade might materialize as the stock manages to break this important level. After the breakout, the 200 day moving average could be used as support going forward. However, until the break materializes, traders need to exercise patience.