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

Third wave breakout due for Lundin Petroleum

Background

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.

Parameters

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

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail