BP chart very bullish: gapping up to a new post-spill high today, well above the 200dma; since the June low, a series of higher highs and higher lows; since July, the 50dma has been a support line:
1. The election means Big Oil has more (than usual) influence in Washington. The current slowdown (halt?) in offshore permitting won't last.
2. the consensus is, BP will resume dividends soon, at about half the previous level.
3. asset sales going well, BP selling in a seller's market, with oil at $90 and the Chinese eagerly bidding up prices for all energy assets.
4. the risk of BP being found criminally negligent is fading
5. Headlines like this are gone: seekingalpha.com The spill has completely disappeared from the front pages and the public's awareness. Global warming in general, and offshore drilling specifically, wasn't an issue in the 2010 election, and likely won't be in 2012. That means the oil lobbyists will be the only ones influencing the government on this issue. If that isn't true yet, it'll be true within 2 years. Drill, baby, drill.
Today: Credit Suisse lifted its 2011 oil-price target and named the oil giant (BP) as its top long-term pick in the sector on the basis that markets have become too pessimistic about the eventual costs of the Macondo oil spill... ...lifted its earnings per share forecasts for European and U.S. oil companies by 23% for 2011 and 10% for 2012 to reflect growing demand. marketwatch.com
My plan: From here on out, I will maintain my LT position (cost $32), while trading the rising channel. In general, I'll buy in increments when the stock is below its 50dma, and sell in increments when the stock hits new highs. So: I sold some today at $44.40, and will probably sell a bit more at $48; buy at $42, $40, $38, and down. |
