Hi-Crush Partners LP produces and supplies monocrystalline sand in the United States. The monocrystalline sand is a mineral that is used as a proppant to enhance the recovery rates of hydrocarbons from oil and natural gas wells. It owns, operates, and develops sand reserves and related excavation and processing facilities, which include a 857-acre facility with integrated rail infrastructure, located in Wyeville, Wisconsin; and the Augusta facility situated in Eau Claire County, Wisconsin. The company offers raw frac sand used in hydraulic fracturing operations for oil and natural gas wells. It primarily serves pressure pumping service providers.
Take a look at the 1-year chart of Hi-Crush (NYSE: HCLP) below with the added notations:
HCLP has been on a nice trend higher since the end of February. After stalling at $14 in both July and August, the stock broke even higher. Now that HCLP is above the $14 level (blue), that level should provide support for the stock, just as it did back in mid-September.
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The Tale of the Tape:: HCLP has a key level at $14. A trader could enter a long position on a pullback down to that level with a stop placed under it. However, if traders are bearish on the stock, a short trade could be made instead on a break back below $14.
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