OSH - Hitting the 30 week moving average
Yesterday Oil Search Ltd (OSH) dropped down very close to its 30 week exponential moving average (seen below in aqua). Looking at the chart over the past 2 years, OSH consistently bounces off this 30WMA. If it were to break below this line, it would be a strong sell signal.
If the market were strong, this would be the perfect time to buy. However, your chances of profiting from a continuation trade like this are much greater if the market (and in particular, the sector the stock sits in) is trending up. The market has performed extremely poorly over the past 2 weeks. This could cause OSH to struggle to return to the $4 mark let alone $4.50.
The previous all-time high for OSH was $4.48, back in September 1997. The stock managed to break this resistance level briefly in the last couple of months and reached as high as $4.58. Since then it hasn’t been able to sustain above this level for very long. Proceed with caution (read: a stop loss).
