360 Degrees of BP

Editor's Note: In this edition of "360 Degrees," RealMoney commentators evaluate BPBP. Like all the oil majors, it's pulling in record profits. Is the recent spate of negative news a reason to pull the plug?

TheStreet.com has always believed that offering a wide variety of opinions and viewpoints -- rather than a monolithic "house view" -- helps readers make better-informed investment decisions. In that spirit, we bring you "360 Degrees."

"360 Degrees" is a feature that takes advantage of our varied stable of contributors to RealMoney, who offer analysis of stocks and the markets from all angles -- fundamental vs. technical, short-term trader vs. long-term investor.

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The Headline Game Is Against It, by Christopher Edmonds

If the shutdown of its badly corroded Prudhoe Bay pipeline wasn't enough, BP now faces an inquiry from federal investigators over suspicions that the company attempted to manipulate the crude oil and gasoline trading markets.

While claims that major oil companies have been involved in collusion are nothing new in an era of soaring oil and gasoline prices, the formality of this investigation is, and it's likely to linger for some time. Combined with recent charges that BP manipulated the propane markets, investors are correct to be concerned, despite BP's continued claims of innocence.

Put together the suspicions of market manipulation with the problems at Prudhoe and the tragic explosion at the company's Texas City refinery in 2005 that claimed 15 lives, and you have an integrated oil company with too much bad karma for most investors.

It's quite possible that BP will be exonerated of the crude market manipulation charges. It's also very possible that the investigation will linger for some time, with little resolution.

Moreover, it's likely we haven't seen the beginning of the investigations related to the Prudhoe Bay missteps. Plus, the recent news that BP CEO John Brown has been subpoenaed to testify regarding the Texas City refinery accident may also lead to meaningful headline risk for the company.

BP may be a fine company, but when the headline game is against you, even the best company finds it challenging to fight the tape. With so many other look-alikes -- Exxon MobilXOM, Chevron CVX and ConocoPhillips COP to name three -- there seems to be little reason to swim upstream.

BP will again have its day. But for investors, it isn't likely to be this week or even next month.

At the time of publication, Edmonds was long Exxon Mobil, though positions may change at any time.

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Stay Long -- for Now, By Dan Fitzpatrick

The uptrend in this weekly chart from 2004 through most of 2005 is easy to see, but for almost a year, BP has been moving sideways. Like many energy stocks, BP is now at that stage where it pays to wonder whether all the smart money is moving out of this stock or whether we're just seeing a bit of consolidation before the uptrend resumes.

Notice the very long price-by-volume bars at the $62-$70 level. Those mark the levels at which the most trading volume took place. More volume means more financial and emotional commitment.

The current trading range between $65 and $75 will ultimately resolve itself. If I were long, I wouldn't liquidate the position until the stock closed beneath current support of $65 on a weekly basis. That would be a new low for the year and enough evidence to me that the uptrend was in serious trouble.