BNP Paribas - BUY

Current Level: EUR 33.18 Observations on the weekly chart: Since 2009 the stock has traded sideways and in the range of 37 and 57 for 75% of the time. The stock is presently trading at a long term support area and could some buying interest at these levels.

Observations on the Ichimoku Cloud: The stock is trading below the cloud. Both the short term indicator and the long term indicators show that the stock is in a downtrend. It is possible that the stock may pull back to the cloud after the sharp decline in prices in the last four weeks.

Observations on the daily chart: The stock is trading below its 18 day and 50 day moving averages, which will be the resistance levels for the stock in the event of a bounce in prices from the current levels.

Observations on the momentum oscillator: The momentum oscillator is trading well below the 100 level and is in line with the movement of the stock price. Confirms the short term down trend of the stock.

Observations on RSI and Stochastic Oscillators: Both oscillators are in oversold territory indicating that the selling on the stock could be overdone.

Summary: Since 2009, the stock has spent 102 months out of the last 132 months trading sideways between 37 and 57. Recently, the stock has seen selling pressure in line with stocks globally. The charts indicate that the trend continues to remain sideways. The stock is trading at a long term support area and could see some buying interest. The oscillators indicate that the selling on the stock is overdone.

It is possible that the trend may reverse suddenly, strict stop-losses should be maintained.

Resistance levels for BNP Paribas: 37.2 (+12% from current level), 42.3 (+27% from current level)

Support Levels for BNP Paribas: 29 (-12% from current level), 26 (-27% from current level).

Trade Idea:

Scenario: An Investor is considering entering the markets at this time (The funds allocated to the trade represents only a small portion of the overall portfolio / net worth).

Position: BUY Entry Level: 32 to 34 Target: 37 (+12% from current level), 42 (27% from current level). Stop Loss: 29

At an EPS of EUR 6.21 per share, the stock has a PE ratio of 5.4 at the current price. At a dividend of EUR 3.10 per share, the dividend yield on the stock is 9%. The stock is undervalued.