Is BP Ready for a Break Out?
Published on Thursday, 30 August 2012 08:56 Written by TradersHuddle Wire
New York, August 30th (TradersHuddle.com) - BP plc (NYSE:BP) closed the trading day at $41.97, near its 50 day and 200 day moving averages set at $40.93 and $42.51 respectively. BP's price action placed the stock above the 50 day moving average but below its 200 day moving average, providing a nice trading setup with clear reference points.
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.
BP seems to be setting up for a tight range between the 50 day moving average as support and the 200 day moving average serving as resistance.
A tiered approach appears to be the best way to maximize possible movements in the stock, as traders could establish a small position in BP and wait for the stock to break out above the 200 day moving average at $42.51. Then they could add to the position as momentum builds with the breakout. On the other hand, if support being referenced at the 50 day moving average set at $40.93 breaks, it could signal further downside for BP in the horizon.
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