BPZ Update

I was asked about a stock we got long around the $2.30-$2.32, it's an energy stock and that's what raised the question.

This is one stock, other than UNG, that I do like long and have just been patient with it. Today BPZ put in a nice 11+% gain putting the equity position at an 8% gain, but as mentioned, I like this for the longer haul and I don't have any intensions of trying to trade around it as it bases, which is why I chose a non-leveraged position in the equity model portfolio rather than an options position.

Here's the update and why I feel fine just sticking it out with BPZ.

 First, this isn't a stock in a position of topping, it's in a position of a stage 1 base, volume and price both confirm that in my view so I'm not worried about a big decline of a stock that is under accumulation.

 The 2 min chart shows a positive divergence yesterday just before BPZ shot up today.

 The 15 min chart shows negative divergences that send price down where it is accumulated, each positive divergence is getting bigger and now we have our first leading positive divergence on this timeframe.

 The 60 min chart also shows a leading positive divergence where the base is being formed, this is a very important timeframe and suggests heavy activity, note the negative divergence before the base and the head fake move in the yellow box above resistance just before the reversal to the downside (around April).

 An even more important timeframe, the 4 hour is also leading positive.

Finally, to see a leading positive divergence form so quickly on a DAILY chart is VERY impressive, this is why I have no interest in trying to trade around this position and possibly miss a series of days like today, even though we had some good notice yesterday. For now, I'll stick it out with BPZ which is about 2/3rds the size of a normal position, larger than a speculative position.