Hi-Crush Partners LP (NYSE: HCLP)

Hi-Crush Partners LP produces, transports, markets, and distributes 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.

Take a look at the 1-year chart of Hi-Crush (NYSE: HCLP) below with my added notations:

1-year chart of Hi-Crush (NYSE: HCLP)

After hitting an $11 peak towards the end of June, HCLP continued lower down to $7. The stock has rallied since, but has continually stalled at the same $11 it hit back in June. Now that HCLP has broken above and held that level, $11 should provide support for higher prices.

The Tale of the Tape: HCLP broke through its key level of resistance at $11. A long trade could be entered on a pull back down to that level. However, a break back below $11 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!

Good luck!

Christian Tharp, CMT