Short term
Trade view / 02 June 2016 at 5:44 GMT

Lundin Petroleum close to its targeted high, but not quite there yet

Instrument: LUPE:xome
Price target:
Market price:

The stock price for Swedish oil and gas explorer and producer Lundin Petroleum has been marching higher since the lows that it hit back in mid-January this year. From this low point we are expecting a five wave impulse higher, to complete the current cycle. And even though we are close, it appears we aren't quite there yet.

This stock is currently, according to the Elliot wave structure in the fifth and final wave higher, and within that fifth wave LUPE:xome appears to be working on an upward tilted triangular structure. This kind of structure should be able to produce one last pop higher before the prospects of a reversal is on the cards.

From a price perspective, Gann is telling us that the SEK 158 and SEK 162 levels, as outlined in a prior Trade View (entitled Lundin Petroleum on the verge of a breakout view) is of importance. Ideally this stock is heading for those levels before turning lower.

Daily oscillators are now starting to reverse higher again, without having been able to really put in a negative trend. And the Bollinger Bands® are still trending higher and haven't started to contract as of yet.

Resistance is found at SEK 153, SEK 158 and SEK 162. Key support is located at SEK 149.

Management and risk description

Lupe:xome is currently presenting a short term opportunity, with defined levels, to go long. We are looking to buy above SEK 153, with an initial stop at SEK 149 for a move higher into SEK 158 and SEK 162 resistance. 

The current structure is telling us that a pop and drop move is on the cards, however the pop even though possibly energetic should ideally be brief in time. Once the target levels are reached take profits.

The risk to this set up is a break higher that manages to trigger our trade, but fails to sustain itself and falls short of the target area. Failed breakouts are often reversed in a fairly fierce manor, thus the tight stop. A break below the stop level puts the SEK 140 as an interesting area of support.


Entry: Buy above SEK 153.

Stop: SEK 149.

Target: SEK 158 and SEK 162.

Time horizon: Two to five days.

LUPE:xome daily chart
LUPE:xome daily chart
LUPE:xome daily development chart
LUPE:xome daily development chart
Source: Saxo Bank. Create your own charts with SaxoTrader; click here to learn more.

— Edited by Robert Ryan

Non-independent investment research disclaimer applies. Read more
Johan Berntorp Johan Berntorp
1st target done. Looks like a good spot to take profits on this one.


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