Todays Big Stock: EQT Corporation (NYSE: EQT)

EQT Corporation (formerly Equitable Resources, Inc.) is a company that conducts its business through multiple business divisions such as EQT Production, EQT Midstream and Distribution. EQT Production produces natural gas in the Appalachian Basin; EQT Midstream provides gathering, transmission and storage services to independent third parties in the Appalachian Basin. Distribution, through its regulated natural gas distribution subsidiary, Equitable Gas Company, distributes and sells natural gas to residential, commercial and industrial customers in southwestern Pennsylvania, West Virginia and eastern Kentucky. So, there’s a little bit about the company, now let’s look at the stock!

Please take a look at the 1 yr. chart of EQT (EQT Corporation) that I have shown below with my added notations:

EQT has formed a nice up-channel chart pattern over the last 5 months. A channel is simply formed through the combination of a trend line support that runs parallel to a trend line resistance.  When it comes to trend lines, I always tell my students that any (2) points can start a trend line, but a 3rd or more confirms it. You can see that EQT has (4) points of channel resistance (red) and (3) points of channel support (green).  Always remember that after the 2nd test of each of these trend lines, the market decided they were important trend lines, not me.  Following the EQT channel can provide you with both long and short trading opportunities.

The Tale of the Tape: EQT has formed a common pattern know as a channel, in this case, an up channel. A long opportunity could be entered on a pullback to the channel support, which at this point seems to be around $50. Short trades could be entered at channel resistance OR if EQT were to break below the channel support.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!

Christian Tharp, CMT