BP PLC (ADR) (Public, NYSE:BP) – Clock That Stock

Clock_That_Stock

The Stock

It was announced today that BP PLC (ADR) (Public, NYSE:BP) would be acquiring assets of its rival Devon Energy. According to Reuters “Devon Energy Corporation announced that it has entered into agreements to sell all of its assets in the deepwater Gulf of Mexico, Brazil and Azerbaijan to BP plc for $7.0 billion.” BP is up 0.78% today on the news and DVN is up over 1%.

The fundamentals of this company are very favorable. Some notable highlights are the 5.9% yielding dividend at current levels, over 30% gain expected when comparing current P/E and forward P/E (assuming levels hold true), and an over 17% ROE at current levels. The company shows much more value than many of its competitors within the industry and sector, and institutions have been seen snatching up shares on net.

Market Sentiment using option volumes on current month contracts is painting an overly bearish impression on this stock, with 1.34 puts traded for each call. Compare this to the open interest put/call ratio at 0.92 and you can get a sense of how investors are covering their long positions today by buying puts. Contrarian theory to overly bearish indications of the put/call ratio details a buying opportunity by betting against the options traders.

Chart Courtesy of StockCharts.com

The Clock

The seasonality of this equity is very positive between now and the beginning of May, seeing gains over the timeframe of 8% on average. The seasonality in the stock corresponds to the seasonal strength in the sector, which sees appreciating prices as a result of lower inventory supply as refiners transition from home energy consumption (heating) to automobile fuels supply for the summer months.

BP PLC (BP) 56.19

+ 0.15 (0.27%)

Seasonality Analysis

Analysis has revealed that with a buy date of March 3 and a sell date of June 1, investors have benefited from a total return of 194.99% over the last 10 years. This scenario has shown positive results in 9 of those periods.

Conversely, the best return over the maximum number of positive periods reveals a buy date of February 7 and a sell date of June 1, producing a total return over the same 10-year range of 192.12% with positive results in 10 of those periods.

The buy and hold return for the past 10 years was 43.94%.

Technical Analysis

Support 2

Support 1

Pivot Point

Resistance1

Resistance2

The Numbers

55.68

55.93

56.17

56.42

56.66

Most Recent Close:

56.19

Support/Resistance Analys

Neutral

52-Week High:

62.38

MACD Analysis:

Bullish Centreline Cross

52-Week Low:

34.92

MACD vs. Signal:

Above/Thinning

Fib. Retracement:

~ 78.6%

RSI Analysis:

Bullish

50-Day MA:

56.24

Stochastic (Fast) Analysis:

Increasingly Overbought

200-Day MA:

52.58

50 vs 200-Day MA Analysis:

50-day Above 200-Day MA

High Critical Level:

56.58

Year over Year Trend:

Strongly Gaining

Low Critical Value:

52.87

Critical Level Analysis:

Within Critical Levels

Average Monthly Gain:

5.0%

MFI Analysis

Above 50 Advancing

Technical Rating:

Candlestick Analysis

Bullish

On a scale of 1 to 10, the higher the rating, the more appealing the investment is to buy at current levels.

Situational Analysis

Past Year

Advancing Sessions %

Return %

10-Year Average

Advancing Sessions %

Return %

Mar 10 thru Apr 9

59.1

7.5

Mar 10 thru Apr 9

56.8

2.5

Best Return: 12.5% – Sell Mar 23

Best Return: 5.2% – Sell Mar 24

Mar 10 thru Jun 8

61.3

40.4

Mar 10 thru Jun 8

55.4

8.7

Best Return: 43% – Sell Jun 2

Best Return: 13.8% – Sell May 8

Mar 10 thru Sep 6

56.8

47.9

Mar 10 thru Sep 6

52.6

8.2

Best Return: 47.9% – Sell Sep 4

Best Return: 17.3% – Sell Jun 19

Following Earnings Releases – Last 12 Periods

During Equivalent Periods of Economic Recovery where Unemployment has Peaked

12-Period Average

Advancing Sessions %

Return %

2-Period Average

Advancing Sessions %

Return %

30 Days After

52.1

90 Days After

45.6

-2

Best Return: 7.8% – After 16 Days on Average

Best Return: 4.3% – After 22 Days on Average

60 Days After

54.3

2.6

180 Days After

49.4

11.8

Best Return: 9.4% – After 25 Days on Average

Best Return: 13.2% – After 150 Days on Average

90 Days After

54.3

2.5

360 Days After

50.3

29.3

Best Return: 12.3% – After 48 Days on Average

Best Return: 34.6% – After 294 Days on Average

Further Analysis

Sector:

Energy

Industry:

Major Integrated Oil & Gas

According to Thackray’s 2010 Investors Guide, the period of seasonal strength for the Energy Sector ranges from February 25th through to May 9th. Seasonal influences are related to the transition period experienced by U.S. refiners when they convert their facilities to gasoline production for the summer driving season from heating oil production for the winter heating season. Inventory levels typically fall below average during this period.

Current Consensus Recommend:

Outperform

Recommendation 1-Month Ago:

Outperform

Recommendation 3-Months Ago:

Outperform

Disclaimer

Analysis, comments, calculations, and opinions offered in this report, available via EquityClock.com, are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed.