Shares digital

BP (BP.) 500.5p

With oil prices hitting all-time highs, shares in oil stocks remain sensitive to sudden weakness in the price of the black stuff. BP suffered last week when it was revealed that Russian police searched the Moscow offices of its 50%-owned Russian joint venture, which analysts suggest may be a sign the Russian state is putting BP under pressure. But fundamentals are attractive, with an 8.7 PE for 2008 and a 5% forecast yield. The share price has just posted a new recent low at 495p, after the 497p low in January 2008, and according to Richard Cunningham, managing director at City Index Advisory, ‘this has taken the hourly indicators on the relative strength (RSI) towards oversold territory. The stock could stage a material relief rally, potentially to 520p-plus’. We suggest buying at the current levels, placing a stop loss at 470p to offset volatility.

ACTION: BUY BP • Target 550p • Stop loss 470p

TIME TARGET: 4 WEEKS