4 Trade Ideas for BP: Bonus Idea

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

BP, $BP, made a top in February after a move from a December low. It pulled back from there to the 200 day SMA for the third time and found support. It is now breaking resistance moving higher with a target to between 35.50 and 36.50 to complete a Three Drives pattern. The Bollinger Bands® are opening to the upside. The RSI is rising in the bullish zone with the MACD positive and moving higher.

There is resistance at 32 and 32.50 before 33.60 then, looking back to before the pandemic at 35.20 and 36.30 before 37.65 and 38.70 then 40. Support lower comes at 31 and 30.25 then 29.25 and 28.20 before 27.60. Short interest is low under 1%. The stock pays a dividend with an annual yield of 4.19% and has traded ex-dividend since February 17th. The company is expected to report earnings next on May 3rd.

The options chain expiring May 6th shows the biggest open interest at the 30 put and at 30 and 32 on the call side. This expiry is pricing in a $2.20 move by expiry. The May monthly chain has biggest open interest at the 29 strike and smaller size at 28 and 27. On the call side it is more than twice as big at 30 and 32. June options show the biggest open interest at the 27 put and the 35 call.

BP, Ticker: $BP

Trade Idea 1: Buy the stock on a move over 31.50 with a stop at 30.25.

Trade Idea 2: Buy the stock on a move over 31.50 and add a May 6 Expiry 31/29 Put Spread (63 cents) while selling the June 35 Call (45 cents).

Trade Idea 3: Buy the April 29 Expiry/May 32 Call Calendar (48 cents) and sell the May 28 Puts (42 cents).

Trade Idea 4: Buy the June 27/32/35 Call Spread Risk Reversal (35 cents).

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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 which with April Options Expiration in the books, saw equity markets with more weakness.

Elsewhere look for Gold to continue its uptrend while Crude Oil pulls back in its uptrend. The US Dollar Index continues to move to the upside while US Treasuries continue to trend lower. The Shanghai Composite looks to continue a short term trend lower while Emerging Markets resume their downtrend.

The Volatility Index is slightly elevated making the path moderately more difficult for equity markets to the upside. The charts of the large cap Indexes are showing more weakness on both timeframes. On the shorter timeframe both the SPY is in a slightly stronger position than the QQQ. The IWM is showing relative strength consolidating in the lower range. 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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