Galp Energia Shares Plunge 11.39% by Midday Amid Disappointment
Shares of the Portuguese oil and gas company Galp Energia fell by 11.39% to €15.36 by midday on Tuesday, December 9, down from a previous close of €17.34. This drop marks the sharpest decline since March 2020 for the Lisbon-listed group, which now shows a weekly decline of 11.57%.
Unusual Market Movements for Galp Energia
Today's session marks an unusually significant movement for Galp Energia, with 0.58% of its capital traded, indicating robust activity. The stock is now well below its 50-day moving average of €17.15 and has also dropped below its 200-day moving average of €16.71. Over a broader horizon, the performance of the Portuguese group remains negative with a decline of 2.6% over three months and a decrease of 6.26% over a year, while the CAC 40 has gained 8.74% in the same period. This drop follows Galp Energia's announcement of a strategic agreement with TotalEnergies regarding its offshore oil discovery in Namibia. The French group acquires 40% of the operating stake in the Mopane field through an asset swap: Galp receives 10% of the PEL56 block housing the Venus discovery and 9.39% of the PEL91 block. The markets reacted negatively to this structuring, as analysts had anticipated a transaction involving immediate cash payments. The agreement also stipulates that TotalEnergies will cover 50% of the initial exploration and development expenses, reimbursed through half of Galp's future cash flows from the project.
Technical Analysis Highlights Weakening Momentum
Technical analysis reveals a marked weakening in the stock's momentum. The Relative Strength Index (RSI) stands at 37, nearing the oversold zone set at 30, suggesting that the stock might attract technical buying interest in the short term if selling pressure continues. However, breaking below the 50-day moving average is a sign of weakness, with the stock now 10.5% below this symbolic threshold. The MACD also shows bearish signals with a signal line at 0.12 above the MACD line at 0.06, represented by a negative histogram of -0.06. This configuration indicates a loss of bullish momentum and confirms the short-term downward trend. The Chaikin Money Flow (CMF) at -0.14 further reinforces this diagnosis by indicating capital outflows, validating the selling pressure observed during the session. The monthly volatility stands at 6.38, a moderate level that could increase in upcoming sessions given the magnitude of today's movement.
Solid Operational Context Beyond the Namibian Agreement
Beyond the Namibian agreement, the operational context of the group remains solid. During the announcement of its third-quarter 2025 results at the end of October, Galp Energia maintained its annual guidance and anticipated exceeding its EBITDA and operational cash flow targets. Upstream production was at 115,000 barrels per day, at the upper end of forecasts. This fundamental basis contrasts with the market's reaction this Tuesday, which primarily penalizes the financial terms of the transaction with TotalEnergies. The stock is now testing its support level at €16.94, already broken during the session, and must find a balance above this threshold to avoid further correction towards the annual lows observed at €12.24. The immediate resistance is at €18.44, a level that now seems distant given the downward momentum initiated.
