Canadian Natural Resources Ltd. is an oil and natural gas production company, which engages in the exploration, development, marketing, and production of crude oil and natural gas. It operates through the following segments: Oil Sands Mining & Upgrading; Midstream & Refining; and Exploration & Production.
Take a look at the 1-year chart of Canadian (NYSE: CNQ) below with the added notations…
Chart of CNQ provided by TradingView
\For the two months going into November, CNQ had been on a steady rally. However, once peaking, the stock formed a strong level of resistance at $44 (red). CNQ has just fallen back from that mark again, but an eventual breakthrough could lead to another leg higher for the stock.
The Tale of the Tape: CNQ has a key level of resistance at $44. A long trade could be entered on a breakthrough of that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $44.
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
Do not trade options until you watch my urgent message: