BP Technical Analysis

Monday, 23rd September 2019 13:37 - by Rajan Dhall

BP and Shell rose off the back of the volatility in the middle east when Iran attacked a Saudi Aramco facility which produced 5% of the worlds total oil output.

Now it has been said that the Saudi's will be able to get the facility back up to 100% capacity as early as next week. 

Looking at the technical picture on the week of the 5th August price broke below a long term trendline spanning four years.

Now this trendline has been broken and retested and more supply is coming back online price could be heading lower. 

There is one major issue standing in the way of this theory and that is the fact that the US has sent more troops over to Saudi Arabia.

If there is any retaliation from Saudi Arabia or the US the price of this stock could hit the roof. Until then, we can only work with the information we have at hand. 

Keep an eye on the headlines to see if Donald Trump throws his toys out of his pram. 

In terms of targets on the downside, the 500p psychological level could hold as support. Past that is the value area or VPOC, this is where there has been most contracts exchanged in the stock. Often this acts as a magnet for price. Another key support is 491p as if this breaks it would make a lower high lower low formation. This would be the first time since the pattern break on the 15th July. So we are in a precarious situation on the technical front and the major level is 491p.

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.