How Lekoil shares might recover

by Alistair Strang from Trends and Targets |

After shares were recently stuffed by some embarrassing news, our chartist hunts for rebound potential.

Lekoil Limited (LSE:LEK) 

We've received a few emails regarding Lekoil's (LSE:LEK) recent price movements. The AIM market used to be notorious for the term "pump and dump", something which mercifully does not happen too often nowadays.

However, in the case of Lekoil, their start to the year with a boost to 11p is questionable.

Surprisingly though, the share price had exhibited a glass ceiling at 6.65p with the implication that movement above this level almost had to take the price to 11p.

It's possible the news regarding Qatar at the start of the year started the price moving in a logical uphill path, the target of which almost had to be met before anything else happened.

Sometimes, software logic makes little sense - aside from the important detail the share indeed reached 11p, then experienced considerable hesitation.

Finally, the release of news that the market perceived as negative has thoroughly stuffed the share price's potentials, landing it in a region where our best hope is for a bounce at 0.3p eventually. Of course, there's a vague chance this "Big Picture" bottom shall remain elusive. 
 
The immediate situation suggests movement above 3.26p should bring recovery to an initial 3.48p. If exceeded, secondary calculates at 4.18p.

In fact, unusually, if 4.18p is exceeded, we can give a third target level up at 4.6p.

Visually, none of these ambitions give any real hope for the future, but, if the share were to trade beyond 4.67p, it becomes very possible the drop has been "overcooked" and some genuine recovery should take place.
 
For the present, we fear the price is now in the hands of "rumour vs reality" price movements but, if it were ever to approach 0.3p, we'd hope for a real rebound. Importantly, we cannot calculate below such a level. 

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, Shareprice, 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, and 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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