Here’s Why I Like BP
British Petroleum
(
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has an AB = CD pattern that is completing as it slams up against a large
Fibonacci price support zone. What is interesting about this support zone is its
makeup. Of the seven Fibonacci levels, six of them are extensions of previous
low to high swings. What is an extension? It is a retracement that goes beyond
100% of the previous swing being measured. For example, if a stock goes from 10
to 20, that is a 10 point move up. So, if it retraces 50% of that move, it will
go down 5 points, or down to 15. A 100% retracement would bring the stock back
to where it started the swing up at 10. The Fibonacci extensions I focus on are
1.272 and 1.618. I have labeled the prices of each of the low-to-high swings I
was looking at and labeled each swing 1-2.
Bottom line: I would anticipate a tradable bounce around
this Fibonacci price zone. Any long trigger I get will be followed with an
initial stop loss order that will be placed just below the price zone around
31.20.
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