Expected price range for BP stock through September 28
In the previous part, we looked at BP’s (BP) moving averages trend. Now let’s consider its implied volatility in order to forecast its stock price range through September 28, the end of the third quarter.
Implied volatility in BP has fallen 5.8 percentage points from July 2 to the current level of 17%. In the same period, BP stock has fallen 7%.
Considering BP’s implied volatility of 17% and assuming a normal distribution of prices (bell curve model) and a standard deviation of one (with a probability of 68.2%), BP stock could close between $44.30 and $39.50 for the 42-day period ending September 28.
Implied volatility in peers
Implied volatility in Petrobras (PBR) has fallen 2 percentage points since July 2 to 48%. Implied volatilities in YPF (YPF) and Suncor Energy (SU) have declined 11 percentage points and 6 percentage points, respectively, in the same period. YPF’s and SU’s implied volatilities are currently 39% and 20%, respectively. In the stated period, PBR and YPF stocks have risen, but SU stock has been flat.
Implied volatilities in the SPDR Dow Jones Industrial Average ETF (DIA) and the SPDR S&P 500 ETF (SPY), which closely resemble the Dow Jones Industrial Average and the S&P 500 Index, respectively, have fallen.
Implied volatilities in DIA and SPY have fallen 4% and 2%, respectively, from July 2 to the current levels of 10% and 8%, respectively. However, in the same period, DIA’s and SPY’s values have risen 6% and 5%, respectively.
In the next part, we’ll look at BP’s dividend yield trend.