Kosmos Energy Ltd : Historic lows

08/14/2012 | 09:28am Opinion : Bearish under 0 USD Target price : 8 USD Stop loss: 9.6 USD

NYSE Oil / Gas Exploration / Production

Kosmos Energy is an oil and gas exploration and production company. The Company's discoveries include hydrocarbon resources offshore along West Africa's Atlantic coast.

The company has a high level of valuation as shown by the “enterprise value/revenue” ratio at 6.52x for the current year. Besides, according to the analysts polled by Thomson Reuters, the earnings per share have been recently downgraded.

Technical analysis shows a bearish trend in the short-term: indeed, prices are very close to a major support area located at USD 9.29 which once broken could extend the downward movement. Moreover, moving averages are trending down which reduces the probability for a short-term rebound.
The most active investors could initiate a short position after the breakdown of the support to take advantage of prices decline. However, if the stock goes beyond this support, we recommend to liquidate the position, hence a stop market is placed above USD 9.29.

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