Was That The Dog or Rotten Easter Eggs

• Posted by Greg Harmon
• on May 5th, 2011

Oil and Gas development companies have been tossed aside like the rotten Easter eggs you just found behind the cushion of the sofa. But two of them have a chance to prove that smell was just the dog and be put back in the refrigerator when they report earnings today, Abraxas Petroleum (ticker:$AXAS) and Petrohawk Energy (ticker:$HK). How do you decide if it was Rover or something worse. Watch the price action and be prepared by studying the charts.

Abraxas Petroleum, AXAS

Abraxas peaked in early March at 6.16 and then tried to regain that level at the beginning of April only to fail again. Now it looks like a two headed Head and Shoulders pattern confirmed through the neckline Wednesday. The target for that pattern is at least 2.86, marked in blue on the chart, at the middle of the previous ascending triangle from most of 2010. Support there can be expected. But before it gets there are other key support levels at 4.06 and 3.93 and then the two sides of the gap at 3.74 and 3.56, to name a few. The Relative Strength Index (RSI ) is moving steeply lower and the Moving Average Convergence Divergence (MACD) indicator is growing more negative, but it finished Wednesday outside of the lower Bollinger band and may need to consolidate before moving lower. Should there be a big surprise that moves it higher then there is resistance at 4.87 and 5.27 before it can run to the 6.00-6.16 area again. Going with Rotten Egg here.

Petrohawk Energy, HK

Petrohawk has been on a tear higher since September and accelerating up. As it has rode higher the 50 day Simple Moving Average SMA) has been a great support area, and it is just above that now. If it holds there then maybe it is time to change Rover’s diet. The RSI and MACD suggest there will be more downside and there is still another dollar room to the lower Bollinger band. Below that 21.80 and then 20.68 are the next support levels. If it does bounce at the 50 day SMA then 24.80 and 26 are the first two upside resistance levels before a retest of the double top at 27.30. Don’t decide until you see the action at the 50 day SMA.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus