Whiting Petroleum Corporation, an independent oil and gas company, acquires, explores, develops, and produces crude oil, natural gas liquids, and natural gas in the Rocky Mountains and Permian Basin regions of the United States. It sells oil and gas to end users, marketers, and other purchasers. As of December 31, 2014, the company’s estimated proved reserves totaled 780.3 million barrels of oil equivalent; and had interests in 4,471 net productive wells across approximately 886,700 net developed acres.
Take a look at the 1-year chart of Whiting (NYSE: WLL) below with my added notations:
WLL has formed a clear resistance at $40 (red). In addition, the stock is climbing a short-term, uptrending support level (green) over the last couple of months. These two levels combined have WLL stuck within a common chart pattern known as an ascending triangle. Eventually, the stock will have to break one of those levels.
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The Tale of the Tape: WLL has an uptrending support and a $40 resistance level to watch. A long trade could be made on a breakout above $40 or on a pullback to the trendline. A break below the trendline support would be an opportunity to enter a short trade.
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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