Southwestern Energy Company (NYSE: SWN)

Southwestern Energy Company, an independent energy company, engages in the exploration, development, and production of natural gas and crude oil in the United States. The company operates through two segments, Exploration and Production, and Midstream Services. The Exploration and Production segment involves in the development of an unconventional gas reservoir located on the Arkansas side of the Arkoma Basin, as well as exploration and production activities in Texas, Pennsylvania, and Oklahoma. This segment also conducts conventional drilling programs in the Arkoma Basin; and development drilling and exploration programs in the Oklahoma portion of the Arkoma Basin, as well as in Texas and Pennsylvania. In addition, it operates drilling rigs in the Fayetteville Shale play, as well as in other operating areas; and explores for natural gas and crude oil under 32 licenses in New Brunswick, Canada. The Midstream Services segment engages in gathering, marketing, and transporting natural gas in Arkansas, Texas, and Pennsylvania.

To review Southwestern’s stock for potential trading opportunities, please take a look at the 1-year chart of SWN (Southwestern Energy Company) below with my added notations:

1-year chart of SWN (Southwestern Energy Company)

What I noticed on the chart of SWN is the one simple price level at $36 (blue). The stock has tested that level as resistance on (3) different occasions. In addition, since bottoming in June, SWN has created a series of higher lows as it has rebounded from that low. So, the stock appears to be working towards a potential break through resistance.

The Tale of the Tape: SWN provides a simple trading opportunity based on its key level of $36: A long position could be entered on a break above $36 with a stop placed below that level.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

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