|
Company Profile
|
BG Group plc specializes in the exploration, production, transmission and distribution of gas, oil and liquefied natural gas. The Group also develops, owns and operates gas-fired power generation plants.
|
|
BG, BG (Candle, Monthly)
|
 | This report will follow the BG Group. All of our Technical Analysis reports will follow the format of starting at the monthly graph, then moving down to the weekly graph, and only then down to the daily outlook.
The monthly chart shows us how the stock has posted a strong move higher over the past few years, blue arrow. The 200 period moving average, grey line, is a near perfect upward curve. Highlighting the strength and consistency of the move.
The stock posted significant percentage moves lower over 2007-2008, but the impact on its long term progress was less than the similar losses on the wider market. BG has in the past couple of years powered up to fresh multi year highs, well above the wider FTSE 100, which remains under its comparable 2007 highs.
So the stock is clearly a long term outperform. On any moves to the 50 period moving average, orange line, we see investors keen to add to long positions, leaving a long term add on weakness position.
|
|
BG, BG (Candle, Weekly)
|
|
On the weekly chart we see how despite the long term strength the stock has set up a bearish leg in recent months. Posting the series of lower highs, orange lines.
Also the RSI over this period has been falling, so it would appear that the weakness that the long term buyers are hoping for has been occurring in the recent months. The RSI trend has just been broken, blue line, suggesting some longer term buyers may already be taking a look. As on the Shell graph to short this strength would be against the long trend and has additional risks. But unlike Shell, BG has at least set up a medium term bearish trend, so medium term shorts are more justifiable.
In summary then medium term shorts are an option for the more active investor, for the more passive we would recommend taking some profits looking to re-enter long positions on the expected weakness ahead, blue arrow.
|
|
BG, BG (Candle, Daily)
|
|
| Charts courtesy of Updata |
The daily chart shows us this medium term bearish trend, upper orange line. We also throw up tentative trend channel around the recent bullish price action, blue lines.
So the medium term outlook has some negativity to it, and the current price action looks vulnerable to profit taking, so we do see some tempted to open trading shorts here. A break above the orange trend line would negate the more medium term bearishness, as it would suggest the short term bullish trend is set to continue. Generally however the longer time period trend dominates. So we would expect the upper medium term resistance line to halt any short term gains and see the current short term trend more likely to break to the downside, to around 1300 at least.
The risk/reward on trading shorts here is not fantastic, so even on a bout of expected profit taking ahead we would stand aside here, but we can see those interested in opening trading shorts. However we would be more interested in the more medium term risk/reward shorts, detailed on the weekly graph above.
.
|
|
FTSE 350 Oil & Gas Sector Constituents
|
Code
|
Sector %
|
FTSE 100
|
|
|
|
|
| BP PLC | BP/ | 27.91 | Y |
| Royal Dutch Shell PLC | RDSA | 25.53 | Y |
| Royal Dutch Shell PLC | RDSB | 19.52 | Y |
| BG Group PLC | BG/ | 15.25 | Y |
| Tullow Oil PLC | TLW | 4.23 | Y |
| Cairn Energy PLC | CNE | 1.34 | Y |
| Petrofac Ltd | PFC | 1.19 | Y |
| AMEC PLC | AMEC | 0.98 | Y |
| John Wood Group PLC | WG/ | 0.75 |
|
| Premier Oil PLC | PMO | 0.57 |
|
| Essar Energy PLC | ESSR | 0.4 | Y |
| Soco International PLC | SIA | 0.36 |
|
| Hunting PLC | HTG | 0.32 |
|
| Afren PLC | AFR | 0.29 |
|
| EnQuest PLC | ENQ | 0.21 |
|
| Cape PLC | CIU | 0.18 |
|
| Lamprell PLC | LAM | 0.16 |
|
| Kentz Corp Ltd | KENZ | 0.14 |
|
| Ophir Energy PLC | OPHR | 0.14 |
|
| Heritage Oil PLC | HOIL | 0.13 |
|
| Exillon Energy PLC | EXI | 0.12 |
|
| Salamander Energy PLC | SMDR | 0.1 |
|
| JKX Oil & Gas PLC | JKX | 0.07 |
|
| Fortune Oil PLC | FTO | 0.05 |
|
| Hardy Oil & Gas PLC | HDY | 0.04 |
|
| Cadogan Petroleum PLC | CAD | 0.02 |
|
| Melrose Resources PLC | MRS | 0.02 |
|
| PV Crystalox Solar PLC | PVCS | 0.01 |
|
|
|
Sector information compiled from Bloomberg – November 2011
|
|