EQT Corporation, together with its subsidiaries, operates as an integrated energy company in the United States. It operates through two segments, EQT Production and EQT Midstream. The EQT Production segment explores for, develops, and produces natural gas, natural gas liquids (NGLs), and crude oil primarily in the Appalachian Basin. As of December 31, 2015, it had 10.0 trillion cubic feet of proved natural gas, NGL, and crude oil reserves across approximately 3.4 million gross acres, including approximately 630,000 gross acres in the Marcellus play. The EQT Midstream segment provides natural gas gathering, transmission, and storage services for the company’s produced gas, as well as for independent third parties in the Appalachian Basin.
Take a look at the 1-year chart of EQT (NYSE: EQT) below with the added notations:
EQT has been trending lower since last May, but over the most recent 6 months the $63 price level (red) has become very important to the stock. Not only was the $63 level a key support multiple times back in the fall, but that level has also been resistance in both January and February of this year. If EQT can break above $63, that should open the door to higher prices.
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The Tale of the Tape: EQT has a key level at $63. A trader could enter a long position on a break above $63 with a stop placed under the level. However, if traders are bearish on the stock, a short trade could be made instead on a rally up to the $63 level.
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