- Summary:
- BP Share Price Forecast: The shares of BP plc are showing strength despite a major drop in global oil prices. Bulls are still defending 456p.
BP share (LON: BP) price slid 0.21% on Monday despite the third consecutive daily gain in the global oil prices. The shares of the British petroleum giant closed their first trading session of the week at 467.25 which was only 1 pence below their previous close.
According to the latest news, BP plc is going to sell a 75% stake in its Bilbao power plant in Spain to energy trader Gunvor. The announcement regarding the 785 MW project was made via a joint press release on Monday.
The global oil prices have taken a sharp turn since the OPEC+ meeitng which occurred two weeks ago. While the UKOIL price has recovered 3.36% from the lows, it still remains 6.5% down from the monthly highs.
However, BP shares are only down 3.46% from the monthly highs as the bulls are still holding the 456p. As long as the shares trade above this strong support level, there is nothing to worry about.
A breakdown below this level will flip the outlook very bearish for the stock, putting the downward price target of 422p into play. This target would become valid only if the price gains acceptance below 456p support level.
BP Share Price Analysis
On a daily timeframe, there is still an unfilled price gap above 510p, which is considered an imbalance by most traders. While there is a strong chance that this gap will be filled in the coming weeks, the current market conditions are not favorable.
Another factor contributing to the downtrend is the prolonged price action below the 200 MA which lies around 496.5p. However, the bullish divergences on the Relative Strength Index (RSI) and the Money Flow Index (MFI) indicators suggest that the stock is oversold and a trend reversal could be around the corner.
