Total (FPP) : Open short ! The major resistance blocks buyers

2016年10月28日

The french blue chip Total (FP, 111b € of Market Cap), from the oil industry, is inside a bearish dynamic since June 2014. This is characterized by lower tops and lower bottoms.

Currently, the buyers seemed to have taken back the advantage, but the Major resistance area at 45.00€ is still preventing the stock from going higher. As long as this level is not passed, the long term trend such as the mid term one will remain bearish. The 200 days Moving average shows that Total is still inside the downside direction ; it does not reverse durably.

For the blue trendlines : I always consider horizontal levels as the most important ones for trading ; the blue trendlines are just to show the pace of dynamics. A breakout of this type of line is not a sufficient indication to make a trade.

Because we are still in a bearish trend, with in addition to that the proximity with a major resistance area, it seems to be a great opportunity to open a short trade at the current price (44.15€ approx.) :
- stop @ 45.20€
- first target @ 43€ (to close 50% of the position) (Reward/Risk = 1.09)
- second target @ 41.60€ (to close the other 50% of the position). (Reward/Risk = 2.42)

Don't hesitate to share your view about this stock in comments !