Matador Resources Company engages in the exploration, development, production, and acquisition of oil and natural gas resources in the United States. The company primarily holds interests in the Eagle Ford shale play in South Texas; the Haynesville shale play, including the Middle Bossier shale play, as well as the Cotton Valley and Hosston formations in Northwest Louisiana and East Texas; the Wolfcamp and Bone Spring plays in Southeast New Mexico and West Texas; and the Meade Peak shale play in Southwest Wyoming and the adjacent areas of Utah and Idaho. As of December 31, 2012, its estimated total proved reserves were 23.8 million barrels of oil equivalent, including 10.5 million Bbl of oil and 80.0 billion cubic feet of natural gas.
Please take a look at the 1-year chart of MTDR (Matador Resources Company) below with my added notations:
MTDR had an amazing run from its low of $8 to its November peak at $24. Over the last 6 months the stock has created a key level of $18 (blue) that has been both support and prior resistance. In addition, the stock has been stalling at roughly the $21 area. At some point soon the stock will have to break one of those two levels.
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The Tale of the Tape: MTDR has a key level of support at $18 and a $21 resistance. A long trade could be made at $18, or on a break through $21, with a stop placed below the level of entry. However, if the stock were to break below $18 traders might want to look to get short on the stock.
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!
Christian Tharp, CMT
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