LinnCo LLC (NASDAQ: LNCO)

LinnCo, LLC, through its limited liability company interests in Linn Energy, LLC, focuses on the acquisition and development of oil and natural gas properties in the United States. The company was founded in 2012 and is headquartered in Houston, Texas.

Take a look at the 1-year chart of LinnCo (Nasdaq: LNCO) with the added notations

1-year chart of LinnCo (Nasdaq: LNCO)

Over the last 2 months, LNCO has been consolidating within a couple of short-term price levels. First, the stock has formed a clear support level at $20 (red). Next, the stock has also been forming a down trending resistance level (blue). These two levels combined have LNCO stuck within a common chart pattern known as a descending triangle that will eventually have to break one way or another.

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The Tale of the Tape: LNCO is currently trading within a descending triangle. A long trade could be made on a break above the down trending resistance or a pullback to the $20 support. A short trade could be placed on LNCO if the stock breaks below the $20 support 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

Follow me on Twitter: @cmtstockcoach