I thought I’d put up the monthly and weekly charts of Santos, with a Long view.
Monthly: There’s no clear monthly Elliott Wave pattern here which is normally a prerequisite for me to do a trade, but quite interesting nonetheless. Stocks that fall through the ATH 50% level tend to reach the 75% (25%) level. It’s there now and oscillating about that $4.48 line shown. That’s often the end point of a down move.
It’s also sitting just under an unconfirmed monthly down Trend Line (dotted orange). Not three peaks to confirm the line but it looks close enough. A break of this would be an entry signal.
There’s also a sort of Monthly Harami reversal pattern forming, although this month isn’t complete yet. Not technically pure but interesting.
Weekly: I’ve marked in light blue two strong bands of support and resistance going back to 1985. Couldn’t show it all as I wanted to zoom in a bit but they’re quite clear. Recent price has been influenced by them. Closed the week sitting just under the lower one.
The weekly also shows a clear Bullish Harami reversal pattern. This, occurring at the 75% retracement level is the real point of interest that attracted my attention.
So all up, not as clear cut evidence as my usual charts, but a few pieces falling into place here to suggest it could be worth a long entry.
I also like taking positions in stocks that have just got their capital raising out of the way. STO has just had a massive one and I think the retail component is still going through. That might need to clear out first to end of month.
I don’t really follow or understand the oil market, but a US commentator on TV this morning was saying oil demand is at it’s highest in 20years, it’s just that excess supply is depressing prices. If true that sort of situation can reverse pretty quickly as the Saudi’s or whoever stop manipulating the market.
So STO seems to be putting in a pretty good case for a long play right now, if not completely confirmed.
This is quite inconvenient for me as I’m fully loaded short at the moment and bearish on the overall market. So I’m not in a position to take a position and hoping it hangs around down here for a bit and waits for me. But not too confident that it will. I think it will move up from this level for a good initial trade, at least over that lower light blue zone, but then might be a slower rise at it puts in a bit of sideways work. Particularly as it’s just raised a huge amount of money from its pre-existing shareholders, there may not be a lot of funds left to allocate to it for a while.
Some sideways range trading between those Blue zones mid $4s to mid- $5s on the weekly would make sense.
Possibly a good one to accumulate here for a longer term hold if that's your thing. It’s interesting anyway. I’ll keep watching.
(20min delay)
