MMR McMoRan Exploration First Signs Of Bottoming Despite BP's Burning Drill Rig

by Olivier on May 3, 2010

Burning drill rig videos and pictures are all over the place. Of course I am referring to BP’s deep drilling catastrophic accident off the coast of Louisiana in the Gulf of Mexico. The environmental damage is said to rival or even exceed the damage of the Exxon Valdez catastrophe.

Of course this is a deep water oil rig that is affected. MMR – McMoRan being mainly in the natural gas business doesn’t seem to help. The selling pressure spilled over to lots of deep drillers irregardless of location and their oil or natural gas focus. Talk has emerged of a potential banning of deep drilling. I don’t think there’s a remote chance of that happening, but overall risk has increased. On to the charts:

MMR McMoRan Exploration Bottoming Candle Tails Technical Analysis Price Chart

Up-to-date MMR – McMoRan Exploration chart on my public list.

The MMR charts shows clear signs of bottoming out. There are two clearly visible down gaps. Sellers are starting to seriously get exhausted. The last two candles shows big tails, a sign of ‘hammering out’ a bottom. The underlying candlestick psychology is simple. Price is testing lower levels on an intraday basis and manages to successfully bounce off those price levels every time it tests them. An additional clue is the recent huge volume. It is not blow-off type volume indicating exhaustion but in my book it pretty close.

The stock has now dipped back into the news induced gap due to MMR’s Davy Jones discovery. Technically speaking if the stock were to move up again from here I would consider it a successful test of the gap. The bullish setup MMR offered a while back is now invalidated. This is now a bounce play betting on improving technicals in a devastatingly bad news environment. Watch out for additional signs the stock refuses to move lower.

This video gives you an impression of what the BP burning oil rig looks like:

I believe – though I may be wrong, because I’m no expert – that this war is about what most wars are about: hegemony, money, power and oil.
– Dustin Hoffman

My public list with all my charts can be viewed here:
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2791469

Buenas noches.

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