UK Oil & Gas (LON:UKOG) has, broadly speaking, experienced price movements in the last couple of years matching other sector members.
Distilled to its basics, that’s an ‘up’ at the start of 2015 and then another ‘up’ at the start of 2016. And realistically, like the sector, the share has not shown real direction.
If I were to use BP (LON:BP) as a case in point, it is supposed to be heading to 499p on the immediate cycle and if this is bettered, I shall accept it's going up.
In the case of UKOG, a share price of 2.285p is required to be bettered, before I can then plan for proper growth.
A triggering movement such as this corresponds with an initial target of 3.4p. It looks like it could be another month or so before the blue downtrend on the chart will threaten price movement triggers.
As a result, there's a pretty good chance the price will remain messing around between red and blue for a while.
Visually, the 3.4p aspiration for an initial surge above blue makes sense and better still, generates force for a longer term 4.75p.
Of course, I've always got a ‘however’ and it comes from the moves which are circled on the chart.
For some reason, the market has seen fit on a couple of occasions to gap this share price upward, introducing a growth element, which on each occasion has proven unsustainable.
This makes me extremely nervous about the red line along the bottom of the chart as it carries the implication should the share price break red, the market will probably cease this artificial inflation and allow weakness to establish itself.
Anything below 1.17p is capable of driving the share down to 0.96p, maybe even 0.18p if propelled by negative news.
Unfortunately, similar to my rise scenario above, this sort of drop scenario also makes some visual sense.
Until next time folks.
Alistair is founder of www.trendsandtargets.com