BP Share Price Forecast: Short-Term Correction to Continue

The BP share price has started the trading day on a negative note, extending the rejection that occurred at the 439.40 price mark on Tuesday. This comes as crude oil prices failed to clear the $123 mark on Tuesday, sending the price lower by $2. 

The decline in the BP share price is more of profit-taking, especially as price action has extended so far up north, with BP gaining 50% in price since September 2021. The long-term sentiment around the stock remains bullish as long as the Russia-Ukraine war and the production shortfalls from Libya and other OPEC nations continue to draw down supplies. 

BP is also making some strategic investment plays, securing a 35% stake in offshore operations in eastern Canada in a deal with Cenovus Energy. This deal will allow BP to completely divest oil sand production and focus on offshore exploration in Canada. The company has also acquired a 41% stake in an Australian wind, solar and hydrogen-powered energy project as it gradually enters into alternative energy. These investments are expected to boost the BP share price down the road. 

Technically speaking, the meteoric rise of the BP share price in the last nine months and the emergence of the rising wedge pattern indicated the potential for a correction in the BP share price. The breakdown move is expected to extend further south, and additional weakness in Brent crude could help the cause of the correction. 

The BP share price is down 1.37% as of writing. 

BP Share Price Forecast

The breakdown move from the rising wedge bounced from the 418.90 support, was rejected at 439.40 and now challenges the support at 430.90 once more. If the bulls fail to defend this price level, 418.90 (6 May/17 May lows) becomes the initial target. A breakdown of this pivot opens the door toward 405.70, where the 9 May 2022 low is found. Additional harvest points for the bears include the psychological support at 400.65 (18 May 2022 low) and 385.75 (3 March high).

On the other hand, a stout defence of the 430.90 support by the bulls will allow for a bounce that aims for 439.40. A clearance of this resistance takes the price action to 453.70 (3 February 2020 low). Additional targets to the north will have to go back to previous highs seen on 12 February 2020 at 478.75 and the 15 January 2020 high at 500.80, which serves as a psychological resistance mark.

BP: Daily Chart