WPX Energy, Inc., an independent natural gas and oil exploration and production company, engages in the exploitation and development of unconventional properties in the United States. The company focuses on exploiting natural gas reserves base and related natural gas liquids in the Piceance Basin of the Rocky Mountain region, as well as developing and growing oil positions in the Williston Basin in North Dakota and the San Juan Basin in the southwestern United States. As of December 31, 2014, it had proved reserves of 4,360 billion cubic feet of gas equivalent. WPX Energy, Inc. was incorporated in 2011 and is headquartered in Tulsa, Oklahoma.
Take a look at the 1-year chart of WPX (NYSE: WPX) with the added notations:
WPX has been in a solid downward slide since its September peak. However, over the last 3 months the stock has been finding support at $10 (green). Now that the stock is there again, traders should be able to expect some sort of bounce. However, if the $10 support were to break, much lower prices should follow.
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The Tale of the Tape: WPX has a key level of support at $10. A trader could enter a long position at $10 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.
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
Follow me on Twitter: @cmtstockcoach