I was looking for 1p as a technical target on Sirius Petroleum (LON:SRSP) in December, with the good news being that this has been hit easily – ironically, helped out by the fundamentals.
December really was the transformational month for Sirius Petroleum, with the headlines focused on a cash raise – something which is always good to get out of the way – and a deal with oil services giant Schlumberger.
Not surprisingly, after an extended period of consolidation this very helpful newslflow caused the Sirius Petroleum share price to finally complete what was clearly quite an exhaustive and extended period of consolidation. This can be seen on the daily chart in terms of the way that after a lengthy bear run from before 2015, the trend defining 200 day moving average, now at 0.4p was finally cleared in July 2016.
Since then, even though we have theoretically been back on the long tack, for much of this time it has not felt like it. Nevertheless, what can be seen now is that having taken out the former intraday resistance of 2016 just above 0.6p, and now for January the 1.2p zone July 2015 peak, we appear to be in the clear to explore the upside.
Just how far this could stretch over the next 3-4 months is suggested by the top of the 2015 price channel at 2.5p. At this stage only a weekly close back below 1.2p is regarded as even beginning to delay the upside scenario at Sirius Petroleum.