Oilex: Triangle target to 0.6p initially

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Oilex: Triangle target to 0.6p initially

It would appear we are somewhat spoiled for choice as far as bouncing minnows are concerned, with recent favourites Bos Global, Wandisco and Versarian all doing well. But Oilex (LON:OEX) takes the prize.

I have to admit that having not had a close look at the Oilex daily chart for quite some time I was quite surprised to see it so low in the range. This of course delivers an opportunity, given the way the shares have been bumping along the bottom for some months.

The reason for saying this is that we see the stock trading in the wake of the March/April double bottom at 0.25p, which was in itself a bear trap reversal from below the February floor. The reason we expect the latest lunge towards the 200 day moving average at 0.41p to be successful on a technical basis is that the post-February price action has been accompanied by bullish divergence in the RSI window. The multi-tested uptrend line implies that as little as an end of day close back above the 200 day line will be enough to provide an overshoot to the upside, and not the kind of relapse we have seen before.

On a fundamental front, in recent days we have not only heard that Oilex has engaged Vox Markets to propel its investor relations, but also the announcement of the mobilisation of the workover rig at the Cambay PSC.

As for what we expect from the share price, it should be the case that while there is no break back below the 50 day moving average at 0.31p, the upside here could be as great as an October price channel top at 0.6p over the next 4-6 weeks.

OEX chart

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