Are Diversified Energy shares heading higher?
Independent analyst Alistair Strang gives his view on the direction of the oil & gas company.
24th October 2023 08:55
by Alistair Strang from Trends and Targets
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Diversified Energy Co (LSE:DEC) are oil & gas focused, work in the US, are listed in London and boast a pretty informative website. The chart below shows the share price currently plumbing the depths of lower lows!
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There’s a pretty grim argument favouring us mentioning that it’s on a cycle to a potential bottom of just 52p, effectively a return to a price level last seen when the listing commenced in 2017. We’d certainly have some concerns if the share price discovered an excuse to sink below the recent 64p, as this would doubtless herald a final tumble to a hopeful bottom. We cannot confidently calculate anything below 52p, so that alone gives some (slight) hope for a bounce if such a silly-looking drop target materialises.
However, since the share reached the 64p level at the start of this month, there has been some fascinating share price movements, which suggest the share price is currently about to weaken down to 70p, hopefully discovering a trampoline level. Any bounce capable of exceeding 78p calculates with the potential of a lift to 85p with our longer-term secondary, if exceeded, working out at a future 98p. Our argument is based on the big picture already suggesting that 64p should be regarded as a bottom and, despite current grotty market conditions, this should be heading upwards.
Source: Trends and Targets. Past performance is not a guide to future performance.
One funny thing about our calculation that proposed a future 98p is that this will effectively represent a “higher high”, with the result that closure above such a price level should send a clear signal to hold on and wait, the big picture giving some pretty interesting future potentials, which, to be fair, we will need to revisit if 98p makes an appearance. We are the first to admit that our abilities in this time-machine game are just a little lacking.
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.
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