Interactive Investor

Petrofac's path to pre-pandemic share prices

13th January 2022 07:28

Alistair Strang from Trends and Targets

The shares are still way below where they were in February 2020, but hitting this trigger level would make things really interesting, believes independent analyst Alistair Strang. 

The Oil & Gas sector is again looking fairly vibrant and, as a result, we’ve opted to run the numbers against Petrofac (LSE:PFC), a pretty large company who describe themselves as a leading international service provider to the energy industry.

A glance at their website reveals a fairly intimidating range of activities, giving a quite firm impression if the oil sectors are doing well, so shall Petrofac.

This being the case, the share price (presently around 135p) looks poised to produce something useful. It’s worth remembering this share was trading around 400p prior to the Covid-19 crash and, thankfully, reversals failed to breach the critical (according to our calculations) 90p level. Repeated attempts managed to produce a low of 90.9p and now, according to the chart since 2013, a degree of optimism is possible.

Above just 140p should prove interesting, working out as capable of triggering some price recovery to an initial 161p. Our secondary calculation proves more promising, coming in with an ambition (if our initial target is bettered) at a longer term 190p.

This secondary target is pretty important, hopefully able to allow the share price to close a session above 182p. Such an event is liable to prove game changing for the future, essentially allowing the share price to react against the dreadful downtrend since 2013, ideally provoking a strong recovery cycle.

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

Currently, what is of some special interest is the sheer number of major “oilers” being rated as "strong buy" by the usual suspects in the marketplace.

We’re being a little cautious with this one in allocating a trigger level 5p above the current price level but, according to our software, we should look favourably on this share should it find sufficient excuse to trade above our 140p trigger.

As for the “Really Big Picture”, if the price manages to close above 182p, we should apparently anticipate a cycle where a virtual challenge to pre-pandemic levels calculates as possible. Apparently, if it ever manages to trade above 376p, we shall need to give the tea leaves a long hard look.

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.