Gulf Keystone Technical Analysis Update

I've been calling a move to the upside in Gulf Keystone Petroleum (GKP) for a few months now, but it's taken a little longer than I expected for the company to begin this process. Nevertheless, it seems to me that the breakout is now on (again...)!











































The key indicator here is the 50 day Simple Moving Average (50 SMA), which has been a consistent obstacle to any rally in GKP over the last year. In fact, the stock has never held a move above the 50 SMA for more than two days until now.


I have a slow stochastic and RSI on my chart above, but I would recommend ignoring them, as historically they've both had worse that 50% accuracies when it comes to picking GKP's future price movements.


Current major resistance levels are at:

40p
41.2p (100 SMA)
42p
52p


These factors combined with the latest fundamental news that the company is beginning to be paid by the Kurdistan Regional Government for its exports gives a positive backdrop to the improved technical situation.


The next catalyst for an expansion in volatility here is the expected CPR on the Akri-Bijeel oil field, that GKP hold a 20% stake in. If this (as currently expected by the market) is revised up, this could be another reason to be bullish on the stock.


With the news that the data room was to be closed at the end of the summer, there is also a chance that we may begin to hear news on the M&A front, which has been quiet for a very long time now.



Good Luck,


The Masked Stock Trader

Gulf Keystone Petroleum - Technical Update

Evening,

I have blown these images up to a slightly silly size so that they vaguely useable for those with poor eyesight. If this causes trouble on your platform than I apologise in advance.

The longer term technical (not fundamental I should add) outlook for Gulf Keystone isn't exactly Rosy, but for those with low average prices a rise to the next resistance point of 32p seems very plausible in the near term.

The longer term classic technical pattern after a major spike downwards, if for a recovery ~75% of the way to the previous significant price high (42p in the near term, giving an initial target of around 31.25p for long traders).


This being said, I would direct readers to an old post of mine referencing the changing fundamental scenario regarding the oil production, payment system and medium term outlook of the company from a fundamental perspective:

http://themaskedstocktrader.blogspot.co.uk/2015/07/gulf-keystone-petroleum-new-payment.html

http://themaskedstocktrader.blogspot.co.uk/2015/07/gulf-keystone-petroleum-positive.html

The picture above demonstrates where technical stops should be placed for short side traders. This being said, I'm not convinced that trading providers (and their clearing banks, which are at the heart of all trading) are actually allowing people to open short positions here.

The image above illustrates the hook reversal pattern as of the penultimate trading day of last week:


I'm not wildly fond of this pattern, so people who want to read about it can find information here:

http://thepatternsite.com/HRD.html


Nevertheless, the rise of over 8% since the confirmation of the pattern suggests a very significant bullish reversal is on the cards for the next couple of weeks.



Enjoy,


The Masked Stock Trader

Gulf Keystone Petroleum: New Payment Analysis

DISCLAIMER: I don't have a licence to give financial advice,etc, therefore none of the below is to be viewed as such advice.


Morning,


As we found out last night, the Kurdish government is expected to begin the repayments to oil producers in the near term:


@ashm_ya: #Kurdistan govt. is expected to spend $150mln per month on repayments to oil producers in the #KRG & spend up to $700mln on govt.expenses


If we assume that this intention is correct and that this does indeed happen over the coming months, then the significance of these payments across all of the companies operating in the region will vary due to many factors.


For shareholders and traders, we must look towards the market capitalisation of these companies in relation to the potential payments they may receive:


e.g.


£5 million as a percentage of Gulf Keystone's current market capitalisation is 1.47%, whereas the same figure as a percentage of Genel Energy's market capitalisation is a mere 0.38%.



In simplified terms, a payment to a smaller capitalised company is more significant than that of the same payment to a larger capitalised company, which in turn makes Gulf Keystone Petroleum (for me at least) a continued buy at these levels and above across the short and medium term.


Enjoy,

The Masked Stock Trader

Gulf Keystone Petroleum - Positive Fundamental Changes

DISCLAIMER: This should not be seen as financial advice to buy or sell stock!



Morning,


I'm a technical fan of Gulf Keystone Petroleum (GKP), but I'm going to put that to one side for the moment and briefly discuss the positive changes that have occurred recently that have made me decide to add to my long position here:



1. Independent Oil Sales:

- To quote the 29/06/2015 RNS: "Currently, sales of Shaikan oil comprise crude oil export deliveries by truck to the Turkish coast and sales to a domestic buyer under a new six months contract which provides for off-take of between 12,000 and 40,000 bopd." 


- This suggests to me that we're finally in a place where the cash position can be allowed to either grow slightly and or remain in a neutral position.


- In addition to this, the chances of a placing being required to satisfy the bond holders of the company in accordance with the general overheads is now significantly reduced.


- If this 12,000-40,000 is sold at the rumoured market rate of $29/barrel (see LSE.co.uk), then this gives a daily revenue stream of between $348,000 and $1,160,000, which should certainly provide some stability to the company in the short term.


- Added to this, the rumour on the market (see LSE.co.uk) is that the current production rates are been split between this independent and the Kurdistan government at a 50/50 ratio, giving a daily revenue figure of £580,000.



2. Kurdistan Bond Raising:

- This is a possible fundamental change in the region that will allow for the possible repayment of debt to GKP by the Kurdistan government along with the future payment of oil produced - this begins to reassert the company's potential dominance in regards to both its production expansion and its asset size.



3. Kurdistan Vs ISIS:

- Kurdistan have proven themselves to be a very good weapon against ISIS in conjunction with US Army technical drone support, which places GKP in a much more geopolitically safer place toil companies in the region.


4. Recent Institutional Activity:

- According to Morning Star, the following funds have recently added positions in the company:

iShares MSCI EAFE Small-Cap
iShares Core MSCI EAFE
SPDR® S&P International Small Cap ETF
iShares Core MSCI Europe
iShares MSCI Europe Small-Cap
iShares MSCI United Kingdom Small-Cap
iShares MSCI Global Energy Producers


http://investors.morningstar.com/ownership/shareholders-major.html?t=GKP



5. Asset Sale Probability:

- All of these factors (especially the increased chances of an increase in payment consistency) add to the potential value of the company to potential bidders and a cashflow positive environment for the company would make GKP a significantly more viable bid for larger companies.


- We must also remember that they are sat on what can only be described as a "world class" asset, which under the current low share price makes GKP a screaming target for M&A in the Kurdistan region.


- On a balance of probabilities the chance of a significant increase in the share price seems more likely over the coming months and years than a major fall, but as ever, do your own research.



Enjoy,

The Masked Stock Trader