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Trading

Should you add BP shares to your portfolio?

Pepperstone
Trading Guides
3 Oct 2022

Some basic information about BP

BP stands for Beyond Petroleum, formerly known as British Petroleum. They are an oil and gas company with headquarters in London.

It is one of the world’s seven oil and gas ‘supermajors’. The others are Chevron, ConocoPhilips, Eni, ExxonMobil, Shell, and Total Energies.  

BP is the 5th largest company within the FTSE100 by Market Cap.

They are transforming. Taken from their website ‘Our purpose is reimaging energy for people and our planet. We want to help the world reach net zero and improve our lives.’  They are decarbonizing and diversifying their business.

Figure 1 the london stock exchange

The bullish run from the 2020 low

BT share price has seen a bullish run of 149.12% from the October 2020 low of 188.50 to the August 2022 high of 469.60. It should be noted that BP has only missed their earnings estimate once in the last thirteen reports. The next is due on the 1st November 2022.

Figure 2 Trading View BP Shares

BP share price correlation with Oil

The chart below highlights the correlation between BP share price and the XTI Oil contract. We can clearly see correlation from the 2020 low.

Figure 3 Trading View BP correlation with XTI

A look from a technical perspective  

The weekly chart clearly highlights BP share price moving higher in a bullish channel formation. Trend line resistance is seen at 477.55, close to the current price.

Figure 4 Trading View Weekly Bullish Channel

A look from an Elliott Wave perspective and we can see the last move lower in 5-waves. This would suggest that the move higher is corrective.

Figure 5 Trading View Elliott Wave

We can also note a previous swing of low of 481.35 from the 24th of December 2018. What was support now becomes resistance. This is close to the channel resistance of 477.55.

Figure 6 Trading View BP correlation

Will this combined barrier hold back the bullish run. Will this coincide with the 1st of November Earnings Reports? Maybe a level to watch and a product to put on the watchlist.

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