Interactive Investor

Analysing Tullow Oil and the price of crude

Owning shares in this oil company has tested nerves over the years, but independent analyst Alistair Strang believes recent moves may offer reason for optimism.

4th June 2024 07:33

by Alistair Strang from Trends and Targets

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Sometimes, a company can experience share price movements which almost defy logic, causing us endless irritation as we try and make sense of the nonsensical.

Tullow Oil (LSE:TLW) falls quite neatly into this category, or perhaps it’s just moving slower than we’d like. Doubtless their share price shall suffer some immediate damage due to the weakening of the oil price but, from a chart perspective, we’re not inclined toward great concern.

From our perspective, this share price requires a slump below 29p to undo the “Big Picture” effort it has been displaying since the start of April. Thus far, it has provided a scenario where movement above 40.3p should next propel the share value to an initial 51p with our secondary, if beaten, an eventual impressive 56p.

Unfortunately, one heck of a lot of folk will be jaded with the share price dance since the start of 2023, the market almost declaring openly it was not going to be permitted above 39p. But with the Blue downtrend since 2019 being exceeded at the start of April, the price appeared to have little difficulty in surging to a new high of 40.32p, even managing to close the day marginally above the 39p level, giving a strong suggestion this downtrend may be important.

We’re more than a little cynical about the price of crude. Despite there being a strong argument for Brent crude to drain down to an eventual $71, it feels like some emergency or other shall make itself known and be used, as always, to recover the price back into the realms of the $80 level, a price level the market feels quite happy with.

If the market gets serious about reversing Tullow, below 29p would threaten a visit to an initial 26p with secondary, if broken, at 22p and hopefully a rebound.

Visually, we quite like Tullow, regarding it as now trading in a zone where a lift to a long-term 75p makes a lot of sense, even visually.

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Source: Trends and Targets. Past performance is not a guide to future performance.

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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