News about slowing demand in China coupled with a soaring U.S. dollar
is putting pressure on commodities from energy to food. Today, I want
to look at an energy stock that is currently locked in a declining trend
that can offer a nice short side profit before its fundamentals kick in
to send it back up.
Apache Corp. (NYSE: APA)
is an oil and natural gas exploration and production company. However,
it is viewed by many as more of a play on natural gas. Analysts expect
natural gas demand to rise and generally seem to think the company's
fundamentals are solid.
On the technical side, though, the trend is clear and it is not
positive. Since peaking in July with an intraday spike above $104 and
failure, APA has fallen to the $94.50 level currently.
More interesting is its overall chart pattern since June. At first
glance, it looks to be a simple trading range, but it is an easy
argument to make that a head-and-shoulders pattern has formed.
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