Take a look at the 1-year chart of Gulfport (NYSE: NSAM) below with added notations:
After rallying from October into March, NSAM consistently declined over next five of months. Since bottoming in August, the stock has been consolidating within a sideways range. While in that sideways move, the stock has formed a common pattern known as a rectangle. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern.
NSAM’s rectangle pattern has formed a resistance at $17.50 (red), which has also been a prior support, and a $16 support (green). At some point the stock will have to break one of the two levels.
The Tale of the Tape: NSAM is trading within a rectangle pattern. The possible long positions on the stock would be either on a pullback to $16 or on a breakout above $17.50. The ideal short opportunity would be on a break below $16.
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