BP Breaks Down Into Key Target

Thursday morning’s session for BP has been a windfall for the bears.
However, shares trade on the “edge” of a support level that – if broken – simply opens price to a further sharp decline.
Let’s pinpoint this level and the view our “Color Value Area” Chart for BP:

For starters, BP has reversed into a short-term downtrend after peaking (with a lengthy divergence) into the $54.00 per share area.
Price broke support and the Moving Average Orientation flipped bearish at the start of August 2014.
From there, shares continued the slide and recently triggered a quick bear flag entry into the falling 20 day EMA.
Today’s sharp gap and sell-off took price rapidly into the key inflection point and target near $45.00 per share which represents:

• The 61.8% Fibonacci Retracement
• The Gap-UP Opening from October 29th
• The Lower Bound of a Value Area Pocket (see blue chart below)

Ultimately we’ll watch closely to determine whether shares rally up off this support level  or else collapse through it into an “Open Air” pocket. (more)

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