After forming and then rising above a series of cup bases in stairstep fashion, oil major BP just completed a new one. If the past year is any indication, it could rise further after reaching the buy point, then start the process again. On Tuesday, the IBD SmartSelect Composite Rating for BP stock jumped to 96, just below a perfect 99 rating. It rose from 94 the day before.
The upgrade means BP stock is now outperforming 96% of all other stocks in terms of key performance metrics and technical strength. Winning stocks often have a 95 or higher grade in the early stages of a new price run, so that's a good item to have on your checklist when looking for the best stocks to buy and watch.
BP Stock Lifted By Rising Oil Prices
As reported earlier, U.S. crude oil prices rose more than 3% to $93.37 a barrel Tuesday, continuing to bounce off Monday's lows after Saudi Arabia suggested OPEC could cut production. The rise in the price of oil this year is boosting the sector, including U.K.-based BP.
BP stock rose 2.6% Tuesday, to close at 32.54 per share, defying the overall market, which close slightly down for the day. BP stock rose above the 32.05 buy point of a cup-with-handle base, a bullish sign, although volume was below average. Strong volume when a stock rises above a buy point is a bullish indicator. Look for the stock to rise further in strong volume.
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Among its other key ratings, BP stock has a strong 89 Relative Strength Rating, of a best-possible 99. It has an outstanding A SMR Rating (Sales+profit Margins+Return on equity) and the Oil & Gas group it belongs to boasts an A- group RS Rating.
One weak spot is the company's 79 EPS Rating, which tracks quarterly and annual earnings growth. That is likely to rise after it reported a 214% surge in earnings last quarter. The quarter prior to that it recorded a 146% leap in EPS.
Number Of Funds Holding BP Rising
BP stock has a weak D Accumulation/Distribution Rating, on an A+ to E scale. That indicates big money investors such as mutual funds and insurance company funds are selling a bit more than buying its stock. Look for that to improve too. The number of top-rated funds holding BP stock rose from 255 in September 2021 to 275 in the June-ended quarter.
In Q2, the company reported 214% earnings growth to $2.61 per share. Top line growth increased 85%, up from 40% in the prior report, to $69.5 billion.
BP stock holds the No. 8 rank among its peers in the Oil & Gas-Integrated industry group. Equinor, Petroleo Brasileiro and Petrobras are among the top 5 highly rated stocks within the group.
