Since our last trading strategy posted on March 18th, BP is approaching our target price of GBp 508. Since then, the groups fundamentals remained strong and analysts have largely revised upward their revenue estimations for the coming years. Even, if stock prices has risen, the company seems undervalued compared to its peers with a P/E ratio at 10x the 2015 estimates and an EV/Sales ratio at 0.53 for the same period.
Graphically, the share is in a period of technical rebound that allowed it to reach the GBp 508 mid-term resistance. This area could trigger some profit-taking, but the strong fundamentals of the company and the recent upward revisions could help the stock to cross GBp 508. If the stock breakout of its trading range, this will be the signal that the bullish trend is resuming. Moreover, moving averages are well oriented and support this idea.
Therefore, it could be interesting to take a long position over GBp 508. The target will then be GBp 545 (swing effect). In case of further failure of the bullish overflow, a stop loss will be placed under the entry points.