But, what are the technical setups behind these two popular retail stocks telling us?

An analysis conducted by Trading Central says that BP still finds itself in a bearish patten, "as long as 436 is not broken up, we favour a down move with 417 and then 391.5 as next targets," say Trading Central.


Analysts go on to say the daily technical indicators are mixed and are calling for caution.

BP is 1.35 pct higher at 430.52.

Also forecasted to maintain a downward trajectory is sector peer BG Group.

"The downside prevails as long as 1039 is resistance," say Trading Central.

Analysts note that the stock's RSI is below 30 suggesting BG is either in a lasting downtrend or just oversold and therefore bound to retrace (look for bullish divergence in this case).

Today's market driver - US politics

Driving stock markets today are events in the US.

The Democrats and Republicans have for the moment come to a compromise on tax rises and spending cuts to address the fiscal cliff.

Whilst they both wanted their own way, neither wanted to be responsible for pushing the US economy back into recession. For now it’s the Democrats who have come out on top, having got more of their demands through than the Republicans.  

However, in many respects, all they seem to have done (in true European style) is kick the can down the road on spending cuts for a couple of months.  Very shortly both parties will have to negotiate the debt ceiling and spending cuts again.  

Europe to remain problematic

Concerning the outlook for 2013 we note the Eurozone will of course be important.

Rowan Dartington’s Tim Cockerill sets out the likely scenarios facing the region:

"Europe has moved out of the spot light for the minute but is likely to return.  For all the summits and austerity measures, Europe’s problems haven’t gone away. Europe needs growth of which there is precious little and even Germany seems to be struggling now.

"The ideal solution would be to write off debt and a new start given to Greece - and perhaps Spain and Italy. But the scale of the problem is far too big for this to be an option. Consequently the ‘can’ gets kicked further on down the road for now.  Because of this there could be a potential of three outcomes:

1) A tipping point is reached when democracy forces a change of governments when austerity becomes too much to bear. If this happens, the Eurozone could fracture;

2) Growth in the rest of the world pulls Europe out of trouble. This would suit politicians best but Europe is the largest economic area in the world and global growth is subdued;

3) The financial world accepts that Europe will limp along in the way it has been for the next five years.  

"Of the three I think the probabilities are 20%/40%/60%."