What’s Woodside Petroleum up to?

Woodside Petroleum Ltd (WPL) is an Australia-based oil and gas company established in 1954. It, along with its subsidiaries, is engaged in hydrocarbon exploration, evaluation, development, production and marketing. Woodside recently paid a dividend of $1.14 with an annual dividend yield of approximately 5.5%. Analyst opinions vary at present with six suggesting an Underperform, three Hold and four suggesting Outperform*.

The chart of Woodside Petroleum below shows the stock has been caught in a sideways band since July 2013 between $37 and $39.50. As at writing the stock stands mid-range with no evidence of a significant break one way or other at this juncture.

UThe recent reversal seen off the upper boundary was due to the company going ex-dividend as mentioned above. That said, the longer a stock remains trapped in a sideways band, the better the potential move will be once the band is penetrated.

 

 

For a sustained trend to start unfolding we first need to see the upper area break on increasing volume. Volume is similar to the fuel in a car – it drives prices. So a breakout coupled with increasing volume will give us confidence of a new developing trend, but any lack of volume suggests buyers aren’t overly committed and another reversal could occur. A breakout on higher volume portends a move to $41 to $42. We would be concerned if prices broke down and through the lower $37 boundary as it would point to, at best, more sideways activity, or at worst a move back toward $32 to $33.

Currently our momentum model does not hold any positions in Woodside although a move up and through $39.50 would initiate a new buy signal.

*Source: Thomson Reuters

Nick Radge heads a team of technical analysts at The Chartist, reviewing individual stocks and markets. Nick Radge is Head of Trading & Research at The Chartist. The Chartist reviews individual stocks and markets and provides trading strategies for individuals. AFSL 288200. You can view The Chartist’s Conflict of Interest policy at www.thechartist.com.au

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This article was sponsored by E*TRADE Australia. The opinions in the article are the personal opinions of the author and not of E*TRADE Australia. To the extent permitted by law, E*TRADE Australia does not accept any liability or responsibility in connection with the use or reliance on the information in the above article. ETRADE Australia Securities Limited (trading as E*TRADE Australia) (ABN 93 078 174 973, AFSL No.238277) is the provider of the ANZ E*TRADE online investing service.

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