Europe Oil & Gas: Take some profit

The STOXX Europe 600 Oil & Gas Index (SXEP) has reached a good level to take some profit, according to Andy Dodd, Head of Technical Research at Louis Capital Markets.

Dodd says the SXEP confirmed a bullish Head-and-Shoulders reversal pattern on 8 April, breaking above the neckline at 320.12. Since then the SXEP has moved to 342.25 which is an area of short-term resistance and he says a good level to take some profits, “especially as a ‘return move’ to the neckline is not uncommon in such patterns.”

Dodd notes however that there are no real bearish reversal signals on the daily chart and, having taken some profit, he’s happy to remain long, and will in fact look to add to his position should any such pullback to the neckline occur.

See chart.