Where Hurricane Energy shares must bounce

Hurricane Energy & Pan African (LSE:HUR & LSE:PAF)

The plethora of damp misery from the USA almost demands we visit Hurricane Energy just to remain on-topic. Whereas a client rather spoiled our aloof behaviour by advising Pan African is liable to benefit should our recent gold thoughts come to fruition. In fairness, it's probably a better reason rather than our in-house addiction to Gold Rush on telly!

It must be admitted Hurricane Energy sounds better than Hurricane Harvey, but both share a similarity in dampening the outlook for those involved.

In the case of Hurricane Energy, we rather suspect it's close to a logical "bottom", a point where some sort of bounce should be expected. We're a little vague on this subject due to the plethora of manipulation movements at the open recently, but there's now a heck of an argument favouring a bounce from 25p.

We're not entirely sure whether we should actually believe this due to everyone and their dog painting a circle at the gap from 24.5p and convincing themselves the price shall cover the gap before any bounce.

This, rather effectively, risks creating a self-fulfilling prophecy. Our secondary target, if 25p is broken, now calculates at 22p where it almost must bounce. The implication, if it doesn't, is an ultimate bottom of 10p which is visually ridiculous.

Any bounce exceeding 29.5p will better the immediate downtrend, launching the price toward 33p initially, hopefully with secondary a very possible 36.75p. Beyond such a point, we will require running the numbers again as some sharp upward travel becomes very possible.

Pan African (LSE:PAF)

This has exhibited quite a respectable downtrend, with traders obviously gearing every decision since July 2016 to ensure the share price failed to ever better the 'blue' line on the chart below.

Joking aside, this level of manual control can often provide some hysterics as a break above signals control has eased and some swift travel generally follows.

The immediate trend suggests anything above 15.5p should target an initial 17.75p. Secondary, if such is bettered, comes in at either 21.25 or 23.75p - we're forced to be vague thanks to some manipulation in November 2016 and suspect the reality shall prove to be a glass ceiling at 22p - a series of highs which also match the downtrend.

Rather conveniently, it's also roughly half way between our secondary targets and there's nothing wrong with a reasonable compromise!

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. 

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