Bill Barrett Corporation, an independent energy company, acquires, explores for, and develops oil and natural gas resources in the United States. It primarily holds interests in the Denver-Julesburg basin, the Uinta oil program in the Uinta Basin, and the Gibson Gulch area in the Piceance basin in the Rocky Mountain region of the United States. The company was founded in 2002 and is headquartered in Denver, Colorado.
Take a look at the 1-year chart of Barrett (NYSE: BBG) with the added notations:
Like most energy related stocks, BBG fell on hard times during the summer and fall. Even recently the stock tested its 52-week low. However, yesterday BBG actually broke back above the prior level of support at $8 (green). That break should mean higher prices for the stock in the short-term, at minimum.
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The Tale of the Tape: BBG had a key level of support at $8 that it has now broke back above. A trader could enter a long position at $8 with a stop placed under the level. If the stock were to break below $8 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