Boston, MA 09/26/2014 (wallstreetpr) – BP plc (ADR) (NYSE:BP) (Closed: 44.06, Down: 3.19%) is not having a great time as the latest court ruling against it prevents it to claim any excess compensation the company paid to any entity, though the company may have paid more than the right formula, according to BP, dictates. The effect on the stock has been disastrous with the price coming down for the last few months with just small pauses, shallow retracements interrupting the powerful downtrend.
The last session opened with a sharp gap down and ended the day at the lowest point. The increasing selling pressure is reflected in the rising volume at 15.3 million against the average volume of 5.7 million. It is already about 18% down from the 52-week high of $53.48 and no sign of finding any bottom any sooner is being felt by the market participants.
In the aftermath of the big bear market of 2007-08, most of the big companies made its major bottom in 2009. BP plc (ADR) (NYSE:BP) turned out to be one of the late-comers with its major bottom coming in 2010 at $26.75. Though it has been more than 3 years since that low, the appreciation in price has not been that impressive with only 100% rise from the low in all these years. Compared to other stocks or even the broader market indices like Dow Jones or Nasdaq, the return of BP has turned out to be paltry.
The price has just broken below a trendline connecting the bottoms of 2011, 2012 and 2013. Coupled with the entry in the previous congestion band of $39.50-$44.50, this breakdown suggests a further drop to $39.50 or even $36 in the coming months.
Sometimes a spike in volume like this signals a Key reversal but the price action till now doesn’t support that kind of scenario. Investors may stay away from this stock and find better opportunities elsewhere.
