Is there big upside for this AIM favourite?

Prospex Oil revisited (LSE:PXOG)

When discussing share prices, sometimes we will appear to use “weasel words” in what can be perceived as an attempt to cover our derrière. The truth is rather more boring – share prices usually do not go straight to target.

Prospex Oil (PXOG) is a case in point. Near-term (i.e. probably this week) it appears movement above just 0.84p will indicate growth to an utterly useless target of 0.96p.

Any self-respecting AIM share will ensure such a trading prospect is gobbled up by the spread, but of particular interest will be a mid-price of 0.96p if bettered.

For us, this indicates underlying strength and thus, despite any near-term shenanigans, it will open the door for continued growth to 1.175p next.

At this point, the share starts to become really interesting as such an ambition bonks against the immediate downtrend from September last year!

Normally, we’d embrace a cautionary note at such a level, realistically expecting some sort of reversal should 1.175 make an appearance.

However, there’s something quite important worth remembering. Whatever provoked the nasty droop back in January (red highlight) did not happen with the price being manipulated (gapped) downward.

Therefore, despite the share effectively flatlining for most of this year, the lack of a gap tells us the share was not moved to a new trading range – something the market tends to defend.

Instead, the drop was simply part of a “normal” trading cycle and, thus, anything above 1.175 is liable to be useful as continued growth toward 1.5p makes sense.

In fact, above 1.5p will tend suggest a coming attempt at the dashing blue line will become a viable ambition.

Last time we covered this lot, we vaguely apologised for its inclusion. We’d guess quite a few folk are keeping their eye on this, due to it once again featuring heavily in our email recently.

About the only sensible warning we can give relates to the red line on the chart. If it gets below 0.45p anytime now, asking Santa for running shoes may prove a wise policy.

 

Alistair Strang has led high-profile and “top secret” software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know “how it worked” with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Source.