Medium term
Trade view / 29 September 2016 at 5:23 GMT

Third wave breakout due for Lundin Petroleum

Instrument: LUPE:xome
Price target:
Market price:

The stock of Swedish Oil company Lundin Petroleum (LUPE:xome) has a very interesting structure emerging.

With help from time cycles, we have managed to pinpoint Elliot wave and Gann-pivots, an important peak that was set on June 9. The peak marked an end to the up-leg that started on January 13 earlier this year.

The correction following the aforementioned peak fell into August 2, from where we can find two time cycle relations.

The up-leg into the June peak took 148 days, which stand in a 180 degree cycle alignment with the 54 days of corrective price action into the August 2 low.

The sum of the cycle off the January lows into the correction lows in August marks a 360 degree alignment to the up-leg peaking in June off the January lows. The low set on August 2 now appears very important for bullish prospects.

So far the current up-leg off the August 2 lows has managed only one smaller cycle higher, we would expect at least three waves higher but possibly five. The potential of a third wave Elliott wave breakout is on the cards!

Looking at support and resistance levels we now have the SEK 145 level as key support short term. Resistance is found at SEK 151, SEK 157, SEK 163 and SEK 169.

The 200 Day Moving Average has a bullish tilt indicating that the longer term trend is in bull's favour. The 50 DMA is more or less flat indicating a medium term correction. 

Management and risk description

The longer-term trend is pointing higher, and with the cycles lining up on August 2 we are trying to locate good risk/reward scenarios for going long.

The SEK 151 is important, a daily close above this level would be indicative of higher prices going forward and will be our trigger. The stop is a daily close below SEK 145 and our targets are SEK 157, SEK 163 and SEK 169.

The risk to this setup is a weak oil price and possibly general stock market weakness.


Entry: Buy a daily close above SEK 151

Stop: Daily close below SEK 145

Target: SEK 157, SEK 163 and SEK 169

Time horizon: About four weeks for the highest target

Daily chart Lundin Petroleum
LUPE:xome daily chart
Daily development chart Lundin Petroleum
LUPE:xome daily development chart
Source, all charts: Saxo Trader - create your own charts with SaxoTrader - click here

— Edited by Adam Courtenay

For more on equities click here         

Non-independent investment research disclaimer applies. Read more


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