Antero Resources Corporation, an independent oil and natural gas company, acquires, explores, and develops natural gas, natural gas liquids, and oil properties in the United States. As of December 31, 2014, the company had 543,000 net acres of oil and gas properties located in the Appalachian Basin in West Virginia, Ohio, and Pennsylvania. It also owns and operates 153 miles of gas gathering pipelines in the Marcellus Shale; and 96 miles of low-pressure, high-pressure, and condensate pipelines in the Utica Shale.
Take a look at the 1-year chart of Antero (NYSE: AR) below with added notations:
AR has been trading mostly sideways over the past 2-3 months. While in the sideways range, the stock has formed a clear support at $25 (green) and a resistance level at $28 (red). At some point, the stock will have to break out of the current trading range.
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The Tale of the Tape:: AR is trading within a small sideways range. The possible long positions on the stock would be either on a pullback to $25 or on a breakout above $28. The ideal short opportunity would be on a break below $25.
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
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