Enerplus Corporation, together with subsidiaries, engages in the exploration and development of crude oil and natural gas in the United States and Canada. The company primarily has interests in approximately 162,000 net acres of lands comprising approximately 77,000 net acres targeting the Stacked Mannville zones and 85,000 net acres targeting the Duvernay formation in the Deep Basin region, Canada. As of December 31, 2014, it had proved plus probable gross reserves of 157,293 thousand barrels (Mbbls) of light and medium crude oil; 43,138 Mbbls of heavy crude oil; 12,798 Mbbls of natural gas liquids; 456,430 million cubic feet (MMcf) of natural gas; and 839,940 MMcf of shale gas.
Take a look at the 1-year chart of Enerplus (NYSE: ERF) with the added notations:
ERF has been trading sideways on top of a $4.50 support (green) during the most recent three months. Now that the stock appears to be testing that support level again, traders should be able to expect some sort of bounce. However, if the $4.50 support were to break, lower prices should follow.
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The Tale of the Tape: ERF has a key level of support at $4.50. A trader could enter a long position at $4.50 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