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Tullow Oil Share Price Popped After Earnings. Dead Cat Bounce?

The Tullow Oil share price popped by more than 4% on Wednesday after the company published strong half-year results. The TLW stock jumped to 46p, which was the highest level since the second week of August. 

Tullow financial results

Tullow Oil is one of the most popular small-cap stocks in London. Data compiled by Hargreaves Lansdown shows that its stock was the most active in the FTSE 250, with a volume of more than 521k.

The company’s shares rose after the company published its half-year results. Its revenue dropped from more than $731 million in the first half of 2020 to more than $727 million in the first half of this year. 

Its gross profit moved from more than $164 million to more than $321 million while its profit rose to more than $93 million. It also turned cash flow positive, with free cash flow rising to more than $86 million. Notably, it also managed to reduce its debt to more than $2.29 billion. 

The stock also rose after a strong update about its Kenyan operations. The firm and its Joint Venture partner have completed the redesign of Block 10BB and 13T licenses. The goal is to boost production in an environmentally efficient manner. 

Tullow Oil’s strong performance is mostly because of the strong oil prices, which have risen by more than 40% this year. 

Tullow Oil share price forecast 

The daily chart shows that the TLW share price has been in a bearish trend in the past few months. Indeed, the shares are down by more than 29% from its YTD high. 

A closer look shows that the stock has moved slightly below the 50-day and 100-day moving averages. Notably, it has formed a bearish flag pattern that is shown in red. The price is along the upper side of this pattern. 

Therefore, the Tullow Oil share price will likely bounce back lower in the coming days. This means that the stock is probably having a dead cat bounce, which is a short-term rally. 

The bearish view will be confirmed if the stock moves below the 50% Fibonacci retracement level at 40p. The dead cat bounce view will be invalidated if it moves above the 23.6% retracement level at 53.95p.

Tullow Oil share price