Shares of Hurricane Energy PLC (LON: HUR) rallied 8.4% higher in an attempt to break above recent highs despite the lack of news releases from the company in the recent past.
The oil exploration company’s last major announcement was mid-January when it released its results for the 2020 financial year. It’s revenues for the year ended December 31, 2020, rose to $179 million compared to the $170.3 million recorded in 2019.
Afterwards, Hurricane’s CEO, Antony Maris, said that the firm was engaging with stakeholders to secure funding to develop further its portfolio, located west of Shetland, within the Lancaster oil fields.
Looking at Hurricane’s Energy’s price chart below, we can see that its stock price is currently in the middle of a wide channel marker by support at 2.2p and resistance at 3.8p.
Now, it appears like the price is about to break out above its current price given that it has formed an interesting structure since bottoming in late January.
However, the current setup does not provide a good risk-reward scenario given that the price is already in the middle of the range, with equal risk to reward for trades in either direction.
As we have mentioned before, the rule to trading ranges is to buy at the top and sell at the bottom, so, I would stay away from this trade at the moment.
Regardless, Hurricane’s share price is likely to break out soon and rally to the top of the range, which would present an excellent selling opportunity.
The current trend may also reverse course and head back to the lower end of the range, creating an excellent buying opportunity for risk-averse bullish traders.
Hurricane Energy share price.
Hurricane Energy shares edged 8.41% higher to trade at 3.146p having risen from Wednesday’s closing price of 2.902p.
Should you invest in Hurricane Energy shares? Hurricane Energy shares are traded on the AIM market of the London stock exchange (the alternative investment market) which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Hurricane Energy shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies
