UK Oil & Gas: Exhaustion gap reversal could lead back to 1.2p

Having been something of a disappointment to traders and investors in the past, I wonder whether UK Oil & Gas (LON:UKOG) is set for a reboot not only in the fundamentals, but also in sentiment…

It has been in intriguing year to date for UK Oil & Gas, the south of England focused explorer. For February we were treated to an upgrade for Horse Hill in the wake of flow testing. But it may very well be that it is with the Weald Basin that the company can reboot its market perception, as drilling starts at Broadford Bridge. The main positive here ahead of the process is that geologically speaking we are looking at a very similar set up to that revealed at Horse Hill. In addition, for those of a squeamish nature, £6.5m has been raised ahead of the new well programmes.


But it is not all about the fundamentals. After a sharp descent for the stock price at the start of this month, featuring a gap to the downside, we have seen a gap fill after a bear trap. This renders the gap an exhaustion feature, something which could very well signal the end of an extended bear run. The view at this point is that at least while there is no break back below the 10 day moving average at 0.9p we could be treated to a bounce back towards the pre-placing zone at 1.20p over the next 1-2 months.