ChartWatchSantos Ltd (ASX: STO)Jilted, Santos shareholders are...

ChartWatch

Santos Ltd (ASX: STO)

Jilted, Santos shareholders are wondering what could have been

There really wasn't anything in the technicals to suggest today's drop was coming. As good as technical analysis is, it's not a crystal ball! But, let's dust off the old ball and try and figure out where to next for Santos.

Big black candles are never a good look. They indicate a rush to the door, with plenty of shareholders desperate to get out and few cash owners brave enough to fish for a bottom. The downward pointing shadow on today's Santos candle provides a sliver of hope, though, that at least a few investors were prepared to punt on a low.

The trough low of $7.41 set on 11 January held on a closing basis today (today's close was $7.41), and this is another small bonus. Past points of demand should act as future points of demand and at least this has occurred so far.

Tomorrow's candle is now crucial. A continuation sell off would demonstrate the supply-side has grasped control of the Santos price and this could facilitate further declines. A large white bodied candle, or one with a long downward pointing shadow would indicate the selling is done, and the demand-side has stepped back in.

For the most part, the Santos chart is largely sideways, so the next candle may be moot. The trading range between $6.70 and $8.10 looks well-entrenched here.