This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
There’s little to honestly say about a specialist E&P Company like Tullow, save that it’s a stock for the punters! Given the tenuous situation crude oil finds itself in at the time of writing, and the relative sensitivity of E&P to oil prices (they don’t have integrated downstream operations like trading and refining to supplement low commodity prices), it’s worth looking at stocks like Tullow for their ability to register very large intraday price swings.
The daily chart shows rising 2016 lows intersecting with over 2 years of falling highs within the next few weeks. The support line is the one to watch though, with daily and weekly technicals returning from overbought likely to see an imminent stern test. A breakdown would surely send long investors running, while a show of strength and break above the 200-day moving average keeps the 2016 uptrend alive. Which trend line will win out? Keep an ear out for those OPEC production freeze comments!
Do you think shares in Tullow Oil will rally back to the highs of 1000p or fall towards 2014 lows of 115p?
It’s worth averting your gaze from the likes of Stockdale Securities’ mammoth 590p target price – not because it’s wrong, but because it’s quite clearly an outlier and looks certain to depend on M&A. The average target price on Tullow Oil, seeking 22% upside, is more realistic. Note also that 16 of 25 brokers have their targets above current levels. At the end of the day though, this is all about the price of oil.
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