Bahamas Petroleum Company Plc (BPC.L) shares opened the last session at 1.81, touching a high of 1.942 and a low of 1.81 , yielding a change of -0.010.  The latest reading places the stock below the Ichimoku cloud which indicates negative momentum and a potential sell signal.

When it comes to investing in the stock market, there are many different styles and strategies that can be used. Some investors will want to do all the work themselves to try to adopt a specific plan all their own. Others will attempt to replicate strategies that have worked for others in the past. Of course, there is no sure bet strategy that will produce instant investing success. Taking the time to study all the different investing methods may be useful for some, but not as helpful for others. What worked in the past may not work again in the future. Investors will often need to decide how much risk they are willing to take on when investing in stocks. Once the risk appetite is figured out, they may want to decide how much and how aggressive they want to invest.

The Ichimoku Cloud was originally called the ‘Ichimoku Kinko Hyo.’ Where Ichimoku means ‘one glance,’Kinko ‘balance’ and Hyo ‘chart.’ Thus the full translation could best be described as ‘one glance balanced chart.’ Originally developed by Goichi Hosada pre WWII, a newspaper journalist (published in 1969) who wanted to develop an Uber-indicator that could provide the trader with various levels of support/resistance, entry/exit points, direction of the trend, and strength of the signal.

The most basic theory of this indicator is that if the price is above the cloud, the overall trend is bullish while below the cloud is bearish, and in the cloud is non-biased or unclear. Lastly, when the price is above the cloud, then the top of the cloud will act as a general support level, and when price is below, the cloud base will act as resistance. But remember the cloud has thickness, and thus resistance does as well, which by making these thicker reduces the risk of a false breakout.

Technical traders may be following indicators to help spot possible entry and exit points. The two main types of indicators are lagging and leading. The leading indicator precedes stock price movements which can be used as a predictor. Lagging indicators may be used as confirmation as they follow price action. Lagging indicators may be highly useful when the market is trending, and leading indicators may be the strongest when the market is moving sideways. Indicators that stay within a certain range are referred to as oscillators. These common indicators are usually monitored for trading signals when the reading gets close to a specific level. 

Another popular tool among technical stock analysts is the moving average. Moving averages are considered to be lagging indicators that simply take the average price of a stock over a specific period of time. Moving averages can be very useful for identifying peaks and troughs. They may also be used to help the trader figure out proper support and resistance levels for the stock. Currently, the 200-day MA is sitting at 1.82, and the 50-day is 1.88.

The 14-day ADX for Bahamas Petroleum Company Plc (BPC.L) is currently at 36.57. In general, and ADX value from 0-25 would represent an absent or weak trend. A value of 25-50 would support a strong trend. A value of 50-75 would signify a very strong trend, and a value of 75-100 would point to an extremely strong trend. Checking in on some other technical levels, the 14-day RSI is currently at 46.82, the 7-day stands at 48.58, and the 3-day is sitting at 59.69. The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of stock price movements. The RSI was developed by J. Welles Wilder, and it oscillates between 0 and 100. Generally, the RSI is considered to be oversold when it falls below 30 and overbought when it heads above 70. RSI can be used to detect general trends as well as finding divergences and failure swings.

At the time of writing, Bahamas Petroleum Company Plc (BPC.L) has a 14-day Commodity Channel Index (CCI) of -22.03. Developed by Donald Lambert, the CCI is a versatile tool that may be used to help spot an emerging trend or provide warning of extreme conditions. CCI generally measures the current price relative to the average price level over a specific time period. CCI is relatively high when prices are much higher than average, and relatively low when prices are much lower than the average. Investors may be watching other technical indicators such as the Williams Percent Range or Williams %R. The Williams %R is a momentum indicator that helps measure oversold and overbought levels. This indicator compares the closing price of a stock in relation to the highs and lows over a certain time period. A common look back period is 14 days. Bahamas Petroleum Company Plc (BPC.L)’s Williams %R presently stands at -53.85. The Williams %R oscillates in a range from 0 to -100. A reading between 0 and -20 would indicate an overbought situation. A reading from -80 to -100 would indicate an oversold situation.

High yielding stocks can be very tempting for investors. Trying to maximize the return on every dollar invested is a goal of many individuals. What investors have to remember is that the stocks that promise the highest return potential may also be some of the riskiest to own. Because past performance can’t guarantee future results, investors may need to do some extra research when adding high risk stocks to the portfolio. Most investors are always on the lookout to spot that next big stock winner before everyone else. Making sure that they are not adding too much extra risk when doing this may be the key to keeping the portfolio balanced. 

As we move closer towards the end of the year, investors might be looking over the portfolio and trying to see what has been working and what hasn’t been. Investors may be studying the most recent earnings reports of stocks they own in order to make sure that everything is still in order. Active investors might be double checking the portfolio to make sure that it is properly diversified. There might be a few adjustments that need to be made in order to keep the holdings balanced. Of course, nobody can say for sure which way the momentum will shift over the next couple of quarters, but being prepared for any situation is generally considered to be a good idea.  

Investing in the stock market will always involve some level of risk. Investors often have to determine how much they are willing to risk, and try to project what the potential reward could be. Taking on too much risk may put the average investor out of their comfort zone. Finding that sweet spot for risk appetite may help investors get on the correct path to conquering the markets. As companies continue to report quarterly earnings, investors will be watching which companies post larger than expected surprises. Analysts will also be watching the numbers closely in order to make sense of the results and update estimates accordingly.