What’s Happening to the Share Price of Santos Ltd?

What does Santos Ltd do?

Santos Ltd [ASX:STO] is a company involved in the exploration for and development of hydrocarbons, supplying natural gas and oil to Australian and Asian markets. The company is also involved in liquefied natural gas production.

Following the share price plunge from late last year, several equity analysts came out at the start of the year recommending STO shares as a buy, saying it was cheap based on fundamental analysis.

That’s interesting, but what was the chart telling us?

What was the chart telling us?

I find it helpful to bring up a chart. Here is the weekly chart of STO.

Santos Chart

Source: STEX

If you look at the start of the year, the chart was telling you whether this stock was a buy or not. If you can’t see that, then the very first thing you must do is go here to start your education. Your investment success utterly depends on it.

What now for STO shares?

This stock is breaking lows presently, it is something you could take note of in your investment analysis. You have to understand what this may be suggesting, regarding future earnings for this company.

But more to the point can you see the chart clearly shows the trouble with trying to buy stocks cheaply, which is that they can become even cheaper.

You actually might do better looking for stocks that are getting more expensive and applying some risk management to that. This is a real hurdle for most investors, as they continue to treat the share market like a supermarket and go looking for bargains. This is not the way to share market success.

To start using the charts to help you analyse broker recommendations and to guide your investment decisions, go here.
Terence Duffy,
Research Analyst, Cycles, Trends and Forecasts

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Terence Duffy is an analyst and chartist, specialising in researching economic trends and cycles.  His primary focus is housing and land affordability. But you can also depend on him to offer his unique analysis of stock market charts. As Terence will show you, the charts often forecast, well in advance, the good or bad news to come — which he details in Cycles, Trends and Forecasts.

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