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BP is struggling today, current down 3% after missing quarterly profit expectations and cutting its investment budget.

OTAS is often used to look at positioning risk ahead of quarterly results and in BP’s case, the stock was screening poorly ahead of today’s results. OTAS shows;

  1. BP is unusually expensive vs the Sector
  2. 20% outperformance vs the Sector since beginning of June
  3. Negative technical screening. RSI Sell signal which has an 82% success rate looking back 10 years
  4. Unusually low Sector–relative implied volatility which is arguably a sign of complacency. Previous extreme low levels in Sector relative implied volatility has preceded sell-offs.

 

  1. Unusually expensive vs sector. Trading on 1.3x Sector multiple which is approximately 2 Standard Deviations expensive on a 2 year view
    BP 1
  2. Strong post Brexit rally. 20% outperformance vs the Sector since beginning of June
    BP 2
  3. RSI Sell signal which has an 82% success rate looking back 10 years. This is the most statistically reliable Technical Signal on BP
    BP 3
  4. Unusually low Sector–relative implied volatility which is arguably a sign of complacency. Previous extreme low levels in Sector relative implied volatility has preceded sell-offs
    BP 4