How to Trade Oil & Gas p8

BP (BP.)

Where next for BP shares?

Oil majors have attractive dividend yields at current share prices as well as good recovery potential helped by downstream and trading activity.
However, an oil major’s share price is apt to fall if it decides to acquire a smaller competitor, hence many investors will consider oil majors to be a long term or income play.

Will shares in BP (BP.) rally towards the highs of 485p or fall towards lows of 320p?

Deposit requirement: 5%

£45,000 of exposure (13,586 BP shares) can be secured for just £2,500.

A bullish trader might consider recent price action to be consolidation ahead of a second phase of the Oct / Nov rebound. Confirmation could be sought by holding off until the price breaks out decisively above 4 week resistance 397p before going long and targeting 52 week highs 485p and a 22% profit.

If the price fell below the 370p level, a bearish trader might short the stock expecting the price to fall further towards 6.5 year lows 320p. Were that to be the case, a 13% profit might be realised.

Broker Consensus: 29% Buy, 64% Hold, 7% Sell

Average 12-month broker target price: 405p

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This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.

Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research

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