Is the Gap between BP’s Moving Averages Expanding?


Aug. 18 2020, Updated 4:43 a.m. ET

BP’s moving averages before Q2 2018

Previously, we saw that BP (BP) stock has surged 18% in the second quarter. In this part, we’ll look at BP’s moving averages.

In the second quarter of 2017, BP reported the start-up of two of its major upstream projects, West Nile Delta and Quad 204, and BP’s 50-DMA (day moving average) overtook its 200-DMA. In the third quarter of 2017, BP’s 50-DMA broke below and then overtook its 200-DMA due to Hurricane Harvey. In the fourth quarter of 2017, BP’s 50-DMA surged due to upstream project updates and its Q3 2017 earnings exceeding analysts’ estimate. In the first quarter of this year, the gap between BP’s 50-DMA and 200-DMA narrowed due to BP’s stock slump led by weaker broader markets and lower oil prices.

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BP’s moving averages in the current quarter

On May 1, BP published its first-quarter results. BP surpassed its earnings estimates, with its upstream earnings rising year-over-year. Higher oil prices and stronger markets boosted BP stock, expanding the gap between its 50-DMA and 200-DMA—a favorable sign. BP’s 50-DMA, which stood 5% above its 200-DMA at the beginning of the current quarter, now stands 7% above its 200-DMA.

Peers’ moving averages

PetroChina’s (PTR), ENI’s (E), and Suncor Energy’s (SU) 50-DMAs stand 5%, 9%, and 6%, respectively, above their 200-DMAs. However, YPF’s (YPF) 50-DMA stands 4% below its 200-DMA.

The SPDR Dow Jones Industrial Average ETF (DIA) and the SPDR S&P 500 ETF (SPY), which track the Dow Jones Industrial Average and S&P 500, have 50-DMAs 2% above their 200-DMAs. In the next part, we’ll estimate BP’s stock price range up until June 29, the next quarter’s end.


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