What’s Woodside Petroleum up to?

Woodside Petroleum Ltd (WPL) is an Australia-based oil and gas company established in 1954. It, along with its subsidiaries, is engaged in hydrocarbon exploration, evaluation, development, production and marketing. Woodside recently paid a dividend of $1.14 with an annual dividend yield of approximately 5.5%. Analyst opinions vary at present with six suggesting an Underperform, three Hold and four suggesting Outperform*.

The chart of Woodside Petroleum below shows the stock has been caught in a sideways band since July 2013 between $37 and $39.50. As at writing the stock stands mid-range with no evidence of a significant break one way or other at this juncture.

UThe recent reversal seen off the upper boundary was due to the company going ex-dividend as mentioned above. That said, the longer a stock remains trapped in a sideways band, the better the potential move will be once the band is penetrated.

For a sustained trend to start unfolding we first need to see the upper area break on increasing volume. Volume is similar to the fuel in a car – it drives prices. So a breakout coupled with increasing volume will give us confidence of a new developing trend, but any lack of volume suggests buyers aren’t overly committed and another reversal could occur. A breakout on higher volume portends a move to $41 to $42. We would be concerned if prices broke down and through the lower $37 boundary as it would point to, at best, more sideways activity, or at worst a move back toward $32 to $33.

Currently our momentum model does not hold any positions in Woodside although a move up and through $39.50 would initiate a new buy signal.

*Source: Thomson Reuters

Nick Radge heads a team of technical analysts at The Chartist, reviewing individual stocks and markets. Nick Radge is Head of Trading & Research at The Chartist. The Chartist reviews individual stocks and markets and provides trading strategies for individuals. AFSL 288200. You can view The Chartist’s Conflict of Interest policy at www.thechartist.com.au

For more information on the stock exchange, visit E*TRADE.

This article was sponsored by E*TRADE Australia. The opinions in the article are the personal opinions of the author and not of E*TRADE Australia. To the extent permitted by law, E*TRADE Australia does not accept any liability or responsibility in connection with the use or reliance on the information in the above article. ETRADE Australia Securities Limited (trading as E*TRADE Australia) (ABN 93 078 174 973, AFSL No.238277) is the provider of the ANZ E*TRADE online investing service.