Gulfsands Petroleum: Triangle breakout could now lead to 25p

It could be said that even considering Gulfsands Petroleum (LON:GPX) as a possible investment would be a case of going where angels fear to tread. However, as seasoned campaigners will be aware, this is precisely the type of company which provides the best opportunities.

One of the most difficult things to do when it comes to stocks which have been in an extended bear phase is to call the turn, but perhaps more importantly one needs to have the faith to go with the change. In the case of Syria focused explorer Gulfsands Petroleum, this is a rather more difficult exercise than most, given the absolute horror of the geopolitical situation in that space, and the way that almost all of it was preventable.


But stepping away from man’s inhumanity to man, it is clear that this company, via its Block 26 asset in the failed country, is sitting on a significant asset. Block 26, combined with hopes for a lasting peace, has been the driver for the share price recovery of late.

Indeed, it can be seen from the daily chart how the shares are pausing for breath within a symmetrical triangle, after last month piercing the 200 day moving average in a trend changing event through 4.95p. The view now is that a break of the triangle formation at 12p is imminent, and that the momentum displayed in recent days could be enough to propel the stock much higher.

The favoured scenario over the next month is for a weekly close above 12p leading to a sharp move towards a 2015 resistance line projection as high as 25p. At this stage only sustained price action back below the 50 day moving average at 7.58p would even begin to delay the upside scenario.