Anadarko Petroleum Corporation engages in the exploration, development, production, and marketing of oil and gas properties. It operates through three segments: Oil and Gas Exploration and Production, Midstream, and Marketing. The Oil and Gas Exploration and Production segment explores for and produces oil, natural gas, and natural gas liquids (NGLs).
Take a look at the 1-year chart of Anadarko (NYSE: APC) below with the added notations:
APC has been trending higher, overall, for the past year. During the most recent several months, the stock has created a key price level at $65 (green). In addition, a trendline of support (blue) has formed from the stock’s March low. A bounce should be expected, but a break of the two supports most likely means much lower prices.
Join our new Linkedin Group by clicking the link below:
The Tale of the Tape: APC has a key level of support at $65, and a trendline of support. A trader could enter a long position at the $65 level, with a stop placed under it. However, a break below $65, and the trendline, could 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!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach