As the drill bit turns for a second time, the Anglo African Oil and Gas (LSE:AAOG) share price has continued to build in anticipation, albeit from a lower base level this time. What is notable with today’s 10% climb is that the price has just pushed through a key resistance barrier – a diagonal formed from the majority of the previous highs since the company joined the London market in March 2017.
This is a significant move as the stock struggled to close above this line when it last attempted it in the summer. Prior to that, I highlighted the area as potential strong resistance when I analysed the chart back in June. Unfortunately, due to failure at the first drill site caused by ground instability, the share price has only just surpassed the 10p level of that time. However, if the stock can hold today’s price move it does bode well for further upside.
Of course, what ultimately counts are the results from the field and if initial feedback on the R1/R2 sands is positive the news will likely light a fire under the share price in anticipation of the bigger prizes on offer. I’m not suggesting this is necessarily a buy at this level – this one is high risk and so far there have been a number of setbacks – but as a holder myself (and a technical analylsis geek), breaking and maintaining this level unlocks the stock to further recovery as anticipation builds for news.