Tethys Petroleum: Sell and Sell Short

PUBLISHED: Jul 25 2012 @ 10:00 | Comments (1) | More info about Azeez Mustapha

Tethys Petroleum Limited is an AIM-listed company which is involved in the exploration and production of oil and gas in Kazakhstan, Tajikistan and Uzbekistan. When this company stock was analyzed, it was discovered that it is in a bearish mode. This is a falling market. While some traders would not prefer to open trades when the markets are in obdurate equilibrium phases, the probability of the price going further south is high.

Technical Forecast: Sell and Sell Short
The Tethys Petroleum shares (LSE:TPL) have been trading lower and lower, confirming the bears’ hegemony. Looking at the chart, you would see that the price has been coming down since early March 2012. The price tanked until the middle of June. On June 20, a short-term bullish rally started and held out till July 5, 2012. A horrible spike occurred on July 19, catapulting the price upwards by far more than a thousand points (reaching a high of 60.00 which was a formidable supply territory), and the price retraced heavily by over a thousand points the same day. Since then the price has been in a renewed bearish mode.

You can see the trendlines drawn on the company’s price chart. It shows a downward bias. The lower trendline has been tested several times, and if the pressure continues further, it may give way. The Relative Strength Index (RSI) period 14 has gone below the level 50 – further confirming the bearish pressure, though frigid sentiments may at times whip up choppy movements in the market. It looks as though the RSI still has a lot of way to go before reaching the oversold region at the level 30. While writing this forecast, the price was trading at 40.50. There are ceiling levels at 50.00, 50.50. Those levels would resist the interest of the bulls. There are floor levels at 30.50 and 30.00, as the bears might continues trudging towards these levels – though sustaining blows from the bulls as they move adamantly towards the levels. Prices may not be cheap when we think they are.

Conclusion: What does it suggest? Clearly the sellers have overpowered the buyers. It is hightime the bulls took a break, because generally speaking, the stock has been bearish this year. So bears, sell and sell short! The buyers must have been desperate because the price has been trending lower and investors are most likely desperate from probable good news that could halt the weakness of this stock.

This article is ended with a quote from a trading maverick:

“A trader stays in touch with the bigger picture. In the end successful trading is all about expectancy, risk management and position sizing.” – Dirk Vandycke

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