4 Trade Ideas BP: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

BP, $BP, comes into the week at a resistance zone. This zone has acted as support in the past. It is also bouncing off a nearly 3 year low. The RSI is rising out of oversold territory in the bearish zone with the MACD negative but curling up toward a cross. There is resistance at 28.35 and 29.75 then 30.50 and 31.25 before 32 and 33.25. Support lower is at 27.25 and 25.70. Short interest is low under 1%. The ADR pays a dividend with an annual yield of 6.62% and has traded ex-dividend since February 21.

The company is expected to report earnings next on May 5th. The May 9 Expiry options chain shows biggest open interest at the 30 strike on both the put and call sides and an expected move of $2.25 between now and expiry. The May chain has big open interest from 34 to 25 on the put side and building from 28 to a peak at 32 and 33 on the call side. The June chain has big open interest from 34 to 27, biggest at 30 on the put side. It is big from 30 to 37 on the call side, biggest at 36.

BP, Ticker: $BP

Trade Idea 1: Buy the stock on a move over 28.75 with a stop at 27.50.

Trade Idea 2: Buy the stock on a move over 28.75 and add a May 9 Expiry 28/26 Put Spread (60 cents) while selling the May 9 Expiry 30 Call (40 cents).

Trade Idea 3: Buy the May /June 31 Call Calendar (32 cents) while selling the May 25 Put (33 cents).

Trade Idea 4: Buy the June 25/30/33 Call Spread Risk Reversal (free).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday that saw with the April options expiration in the books, equity markets continued to focus on the impact from tariffs and almost nothing else.

Elsewhere look for Gold to continue its record run higher while Crude Oil consolidates in a broad range with a potential reversal higher brewing. The US Dollar Index continues to drift to the downside in a short term downtrend while US Treasuries consolidate in their downtrend. The Shanghai Composite looks to continue in consolidation while Emerging Markets remain in broad consolidation.

The Volatility Index looks to remain elevated but dropping making the path slightly easier for equity markets to the upside. Their charts continue to look weak though particularly on the longer timeframe. On the shorter timeframe the QQQ, IWM and SPY could show some strength on moves out of last week’s tight ranges to the downside that could lead to a turn around. Wait for proof. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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