Targa Resources Corp., through its general and limited partner interests in Targa Resources Partners LP, provides midstream natural gas and natural gas liquid (NGL) services in the United States. The company operates in two divisions, Gathering and Processing, and Logistics and Marketing. It is involved in gathering, compressing, treating, processing, and selling natural gas; storing, fractionating, treating, transporting, terminaling, and selling NGLs and NGL products; and gathering, storing, and terminaling crude oil and refined petroleum products.
Take a look at the 1-year chart of Targa (NYSE: TRGP) below with my added notations:
TRGP had been declining lower into the end of 2015, but ultimately the stock bottomed in January and started to rally higher. During the most recent three months, however, the stock had stalled at a level of resistance at $45 (green). Now that TRGP has broken above that level, $45 should provide support for higher prices.
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The Tale of the Tape:: TRGP broke through its key level of resistance at $45. A long trade could be entered on a pull back down to that level. However, a break back below $45 could negate the forecast for a higher move and would be an opportunity to get short the stock.
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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