Penn West Petroleum Ltd (NYSE: PWE)

Penn West Petroleum Ltd., an exploration and production company, engages in acquiring, exploring, developing, exploiting, and holding interests in petroleum and natural gas properties and related assets in western Canada. The company’s principal proved plus probable reserves are located in Alberta, British Columbia, Saskatchewan, Manitoba, and the Northwest Territories, Canada. It also has proved plus probable reserves interests in Wyoming in the United States. The company was formerly known as Penn West Energy Trust and changed its name to Penn West Petroleum Ltd. in January 2011. Penn West Petroleum Ltd. was founded in 1979 and is headquartered in Calgary, Canada.

Please take a look at the 1-year chart of PWE (Penn West Petroleum, Ltd.) below with my added notations:

1-year chart of PWE (Penn West Petroleum, Ltd.)

PWE peaked last September at $17 and lost half of its value from there. The stock seems to be forming a base over the last (9) months all the while hitting a very important level of resistance at just under $12 (red). No matter what the market has or has not done since November, PWE has not been able to break through that area of resistance. If the stock can finally move above $12, higher prices for the stock should follow.

The Tale of the Tape: PWE has a key level of resistance around $12. A long trade could be entered on a break through that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $11.75 – $12.

Would you like assistance in making your TBS trades? If so, email me at Christian@yolopub.com and let’s talk about working together one on one!

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