Penn Virginia Corporation, an independent oil and gas company, is engaged in the exploration, development, and production of crude oil, natural gas liquids, and natural gas in various onshore regions of the United States. Its operations include the drilling of unconventional horizontal development wells in shale formations primarily in the Eagle Ford Shale in South Texas. The company also has operations in the Granite Wash in the Mid-Continent, the Haynesville Shale and Cotton Valley in East Texas, the Selma Chalk in Mississippi, and the Marcellus Shale in Pennsylvania. As of December 31, 2013, it had 1,213 productive wells; owned approximately 280,400 acres of leasehold and royalty interests; and had proved reserves of approximately 136 million barrels of oil equivalent.
To review Penn’s stock, please take a look at the 1-year chart of PVA (Penn Virginia Corporation) below with my added notations:
Since October of last year PVA has worked its way higher. Over the last 3 months though, the stock has formed a key level of resistance at $18 (red). That resistance is also a 52-week high resistance. After a sharp drop back in May, the stock appears to be headed back up towards its $18 resistance.
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The Tale of the Tape: PVA has an $18, 52-week high resistance level to watch. A long trade could be made on a break above that $18 with a stop placed below it.
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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