Wednesday, 9 February 2011

Tullow Oil Interesting New Breakout and Chart: 2011-02-09

Tullow Oil has recently broken out of its funk of the year 2010 when it went nowhere.

It recently broke out to 1400p in the last couple of weeks. This is interesting because this is a breakout above a previous high of a year ago at about 1360p and a possible breakout from what looks like an inverted Head and Shoulders pattern lasting a year. These charts are bring placed here to test whether this kind of technical / visual analysis works. The price target from the new chart is 1645p.

New chart 2011-02-09 for Tullow Oil (TLW.L on the London Stock Exchange):

My previous charts make an interesting comparison because I had a target of 1620 as far back as 2009 with interim targets of 1220 and 1280 that were both reached and exceeded before the price retreated into a trading range until now. Here is the first H+S from 2008-2009:

Once the 1280 target was exceeded, the chart looked toppy:

and went into a trading range for a year, forming the new potential H+S pattern as it went.

This longer term chart combines the others and shows the positions of the two inverted H+S patterns:

I sold some Tullow shares at a profit while they were in the trading range but retained half of my position (which was bought by my father at about 624p). It will be interesting to see if the 1620/1645 targets are achieved in the near future. It is strange because this apparent breakout is happening despite the bad news coming out of some North African countries, or perhaps because of it - or perhaps the Egypt political siruation has had no effect and it is all about Tullow itself!

If this 1600+ target is reached soon, then it will be a valuable lesson to me to have some belief in my chart analysis to have have more patience, to wait for targets to be achieved or at least to continue to watch assets of interest that I have charted before.

This posting is merely a market observation and is not in any way to be construed as financial advice and is not a solicitation to buy or sell any financial instrument at any time.

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