BP plc (ADR) (NYSE:BP) ended the session with a positive gain of 1.29% yesterday but the stock failed to sustain the intraday high levels and lost about 2% by the closing, a very similar thing which took place on the previous day too. The day high of $41.65 was very close to the resistance area around $42, which rejected the price multiple times in February and March. The weak intraday structure of the price and the much elevated volume of 17 million, against the daily average of 6 million only, raise questions if the smart money is distributing the stock at the higher levels.
BP plc (ADR) (NYSE:BP) Whiting refinery is already suffering from a continued strike by the United Steelworkers, a two month old strike beginning on February 7. The lead negotiator for the contract negations is Royal Dutch Shell plc (ADR) (NYSE:RDS.A), who reached a tentative argument including terms for a long term contract, to be offered by all the oil refinery companies in the US employing USW workers. The contract negotiations are yet to reach the final state as BP plc (ADR) (NYSE:BP) is yet to respond to the final offer given by the USW Local 7-1.
The crash of the oil price in the last 1 year has forced the company to adopt a value over volume program, making cutbacks in its workforce to save cash but still the company kept the high remuneration of the top executives nearly unchanged. The rate of return has dipped with the stock price falling over 15% in the last 12 months but the pay of the CEO increased by 25%. Glass Lewis, one of the leading shareholders and advisor of about 10% of the shareholders, is going to vote against this pay.
Technically, any decisive move in the stock will emerge only on a move beyond the range of $35-$42.