Plains GP Holdings, L.P. together with its subsidiaries, owns and operates midstream energy infrastructure in the United States and Canada. The Transportation segment engages in the transportation of crude oil and NGL on pipelines, gathering systems, trucks, and barges. The Facilities segment is involved in the provision of storage, terminalling, and throughput services for crude oil, refined products, NGL, and natural gas; NGL fractionation and isomerization services; and natural gas and condensate processing services. The Supply and Logistics segment engages in merchant-related activities, including purchase of crude oil, cargos, and NGL; storage of inventory, and NGL and natural gas; and resale or exchange, and transport of crude oil and NGL.
Take a look at the 1-year chart of Plains (NYSE: PAGP) below with added notations:
PAGP had been in an overall uptrend from February til October. However, the stock eventually stalled, as PAGP has repeatedly hit the same resistance at $35 (red). The stock is sitting just under that level now. A solid close above the $35 should lead to another leg higher for PAGP.
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The Tale of the Tape: PAGP has a 52-week resistance at $35. The possible long position on the stock would be on a breakout above that level with a stop placed under it.
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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