Is the time right for this Bahamian oil stock to heat up?

Its share price has behaved badly for five years, but crude price hikes could spell good news.

Bahamas Petroleum Company

While we enjoy Caribbean skies here in Argyll (but with Arctic temperatures) our thoughts turned to Bahamas Petroleum (LSE:BPC). It is a company which operates in some of the most desirable holiday destinations with a range of offshore exploration, appraisal, development and production assets and licences. They even operate on the land in Trinidad. Their share price has behaved badly over the last five years, and is now trading in a zone where we cannot calculate a bottom.

The important thing is that the share remains trading, and perhaps the current upward volatility in the price of crude shall finally extend some grace to Bahamas’ price movements.

The share price has been trading at a pretty accurate bottom level just above 0.4p since February. While there has not been a convincing bounce, we are impressed at the effort employed to keep the share trading above 0.4p, hopefully an attempt to avoid creating an 'Elvis has left the building' moment.

All we ask is for the price to almost double from its current level of 0.525p, as this would justify close attention thanks to some strong acceleration potentials. Above 0.91p should prove capable of triggering recovery to an initial 1.37p with secondary, if exceeded, at 2.31p.

• Shell and BP shares: what the City really thinks
• ii view: Petrofac swings to a loss
• Why reading charts can help you become a better investor

At this level, things certainly have the opportunity to become exciting. Arithmetically the shares highs of 10 years ago could easily provoke strong growth, especially if price acceleration occurs due to positive news flow from the company.

We've shown the various target levels on the chart, absolutely none of which appear viable currently, but with closure above 0.91p this could mean entering a cycle with 14p as an attractive eventual point of interest.

Obviously, we're biased as we love the Bahamas, or indeed, anywhere warmer than Scotland at present!

Source: Trends and Targets. Past performance is not a guide to future performance

Alistair Strang has led high-profile and 'top secret' software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know 'how it worked' with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea.