Tullow Oil plc : Bearish trend should continue
By Bastien Chabasseuil
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
GBX 859 | GBX 0 | GBX 887 | +100% |
From a fundamental viewpoint, the group is in a bad financial situation with an important debt level. Leverage is at 1.01x for the current year. Analysts have recently downgraded their forecasts for earnings per share. This indicator is often a precursor of a declining profitability and a worsening climate of investors' confidence.
Technically, the share is in a downward trend. The moving averages are decreasing and are still above prices, thereby stopping any rebounds. The security is going toward the GBp 817 support, a level that will represent the first target.
Taking into account fundamental and technical elements, investors can initiate a short position with a price target at GBp 817. A crossing of the 20 days moving average around GBp 883, a short-term key point, will invalidate the bearish strategy, which justifies a stop loss.