Pioneer Natural Resources (NYSE: PXD)

Pioneer Natural Resources Company engages in the exploration and production of oil and gas in the United States. The company produces and sells oil, natural gas liquids (NGLs), and gas. It has operations primarily in the Permian Basin in West Texas, the Eagle Ford Shale play in South Texas, the Raton field in southeastern Colorado, and the West Panhandle field in the Texas Panhandle. As of December 31, 2014, the company had proved undeveloped reserves and proved developed reserves of approximately 89 MMBbls of oil, 42 MMBbls of NGLs, and 317 billion cubic feet of gas; and owned interests in 6 gas processing plants and 8 treating facilities.

Take a look at the 1-year chart of Pioneer (NYSE: PXD) below with my added notations:

1-year chart of Pioneer (NYSE: PXD)

Over the past month PXD has hit $150 as resistance (red) on two separate occasions. In addition, the stock has been climbing a trend line of support (blue) since the end of August. Eventually, the stock will have to break either the $150 resistance or the trendline support.

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The Tale of the Tape: PXD is winding up between two key levels. A long trade could be made at the trendline support or on a break above $150. A break below trendline 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!

Good luck!

Christian Tharp, CMT

Follow me on Twitter: @cmtstockcoach