Take a look at the 1-year chart of Energen (NYSE: EGN) below with my added notations:
EGN has been in a persistent downtrend since June. During the most recent 4 months the stock has formed an important trend line of resistance (black). Always remember, any (2) points can start a trend line, but it�s the 3rd test and beyond that confirm its importance. So, EGN obviously has an important trendline of resistance, which currently sits near $66.
The Tale of the Tape: EGN is currently stuck under a down trending resistance. A break above that resistance should mean higher prices, thus a long trade could be made. Short traders might look to enter a trade at the resistance with an expectation of a fall back down to the $55 support (blue).
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