Energen Corporation (NYSE: EGN)

Energen Corporation, through its subsidiary, Energen Resources Corporation, engages in the exploration, development, and production of oil, natural gas liquids, and natural gas in the Permian Basin in west Texas and the San Juan Basin in New Mexico. The company was founded in 1929 and is headquartered in Birmingham, Alabama.

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

1-year chart of Energen (NYSE: EGN)

Over the past three months, EGN has formed a key level of resistance to watch at the $60 (red) mark. The stock tested that level twice back in September and October, and last week the stock tested it again. A strong close above that $60 level should lead to higher prices.

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The Tale of the Tape: EGN has a key level of resistance at $60. A long trade could be entered on a break through that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $60.

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