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Rumors and the Chart – A Quick Look at BP

|Includes:BP p.l.c. (BP)

The UK rag The Daily Mail broke a story yesterday that Royal Dutch Shell may be quite serious about a buyout of British Petroleum. This rumor has been quite profitable for my position in BP (follow that and the rest of my portfolio here) - but I think the chart says that more strength is ahead.

My chart notes (click the image for a better view) show that today's price action topped multi-year resistance going back to 2008. Remember how bad 2008 was for stocks? Nobody was willing to pay more than about $45 for BP from about Sept 2008 through until May 2009. Then the oil spill knocked BP back down to the 20's.
But now, the chart says "all that is behind BP." The rumors were a nice catalyst this week, but the real reason for higher prices is increased demand for the stock since July!

Stocks: BP