Burren - Charts & Fundamentals

BUR's chart is not straightforward currently, but here are some pointers.

1. The main up-channel, which encompasses the entire two-year history, is as strong as ever, and I doubt will be challenged for some time to come. Those channel lines are, as of Friday's close, lying at 841p and 1,500p respectively. At 912p therefore, we are 11% off the bottom of that range.

2. The past six months has seen the formation of a meandering, upwards consolidation pattern. This is defined by its own channel, whose limits are currently at 800p and 950p so, at 912p we are 25% off the top of that range.

You will notice that the lower bound of the short channel is below the bottom of the long channel. In this situation, the long channel should prevail.

In the shorter term still, the recent rise from 778p to 963.5p, followed by a flattening during the Christmas period, looks potentially like a rising head-and-shoulders pattern which might presage a short, sharp dip towards the old long-term channel line. Depending on when, and for how long, this would take us to between 860p-880p before rebounding strongly. How likely is this?...

The timing of these things is often caused by company announcements, or the unexpected lack of them. I think we are expecting a trading statement and hopefully other statements regarding ongoing activities. Let us assume we get two in January...in the 2nd and 3rd weeks, say. IF this were to happen, I'll make a stab in the dark and say that, from the shape and slope of the h&s pattern, the low-point would be around 877p on the 16th Jan.

Two other things to bear in mind; one positive, one negative. The oil price is not weakening. Current gas shinnanigans between Russia and Ukraine will only strengthen it, which should boost producers more than explorers. On the other hand, there are some feisty explorers like VOG and MAX currently which are commanding a lot investor's cash. This may divert funds from old stalwarts like BUR.

Summary:
Long term holders have much to be happy about...£12.50 some time before June.
Traders might see a short position...but watch out. It won't last long and you will need luck and exquisite timing.

Happy new year.