Tullow Oil Lures Buyers into a Trap

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Tullow Oil shares (LSE:TLW) are currently seen as a lure that can make buyers go into a trap – as the current price action shows. The market trended seriously downwards in the most part of this year. The market started making some bullish attempts from October 2015, which has been rejected repeatedly around the resistance level at 260.

The price went briefly below the lower Trendline in October and went back into the space between the upper and the lower Trendlines. This month, the price has gone below the lower Trendline again, as the RSI period 14 goes below the level 50. Clearly, the bullish attempts that were seen recently were a lure that could entrap buyers.

Sadly, some buyers have fallen into this trap and they might be sliced up along the way. The price action in the chart indicates that the southward movement could be resumed in earnest. The support level at 150 could be tested and breached to the downside. Should this happen, another support level at 100 would be tested.

This forecast is ended by the quote below:

“When I started trading, credit card interest rates were 20+% a year compounding, double digit unemployment was common, and if you read the newspapers it looked like we were one step away from running out of oil. Yet – somehow, great traders were made in that era. And they will be again.” – Louise Bedford

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