Medium term
Trade view / 15 August 2016 at 5:11 GMT

Lundin Petroleum once again of interest for shorts

Instrument: LUPE:xome
Price target:
Market price:

The stock of Swedish oil company Lundin Petroleum (LUPE:xome) did bounce, unfortunately that didn't help the trade view published on July 28 as key levels were broken to the downside. This now puts the stock of this company in a very interesting situation: is it going to break higher or has it reversed to the downside. In large we are at a so-called inflection point.

For long-term bullish prospects we need a daily close above SEK 163, but until then this stock appears range bound with the aforementioned level as a breakout pivot and SEK 137 as support to the downside.

The move lower from the July into the August 2 low took 20 days, from there the bounce has now managed to rise for 10 days; on day 12 which was Sunday (yesterday) we have an alignment for a reversal lower. 

Even though early in the making, a spinning top Friday is telling us that bearish pressure in the coming days is on the cards. Also note how the Slow stochastic indicator (STOC-S) is at levels from where a reversal can take place.

Short-term support pivots are SEK 151, from there we have SEK 145 and SEK 137.

Management and risk description

The plan is to sell the stock of Lundin Petroleum (LUPE:xome) upon a close below SEK 151, which would be indicative of at least a short to medium-term swing lower into support at SEK 145 and also possibly a retest of the SEK 137 level. The stop could be placed at SEK 157 for starters. Once the first target has been hit the stop can be lowered to a close above SEK 151. A daily close above SEK 151 could also work as the initial stop for those who prefer tight stops.

The risk to this setup is a fake break lower that is quickly reversed.

The past trade view from July 28 is found here and the one before that published on July 8 is found here.

Entry: sell below SEK 151.

Stop: SEK 157 or a daily close above SEK 151.

Target: SEK 145 and SEK 137.

Time horizon: one to two weeks.

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

– Edited by Gayle Bryant

For more on equities click here

Non-independent investment research disclaimer applies. Read more
Johan Berntorp Johan Berntorp
A bearish candle print today, might be able to close for a bearish trigger tomorrow.
Johan Berntorp Johan Berntorp
Today this stock managed to use the trigger level as support, implies SEK 157 is in for a test and a failed confirmation.
Johan Berntorp Johan Berntorp
Failed confimation of the time cycles, this far. If we head lower tomorrow and from then on shorts are still on upon trigger.


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