Parsley Energy (PE) is likely to trade sideways over the intermediate term. Read further for our parameters and technical reasons.
In this one-year daily chart of PE, below, we can see that prices more than doubled in the past 12 months -- impressive. Prices stayed above the rising 50-day moving average line from March to September, but since late September prices have crossed above and below the 50-day average. The slope of the 50-day average has begun to flatten in recent weeks.
The On-Balance-Volume (OBV) line moved up with the rally until August and then it turned flat. A price rally can continue without clues of aggressive buying but it doesn't give us the confidence that increased buying gives us. A bearish divergence can be seen on this chart from August to December -- as prices rose, the momentum study weakened. Each new high for the move up had less power behind it.
This limited weekly chart of PE, below, still adds color to the analysis. Prices are above the rising 40-week moving average line. The weekly OBV line turned up in 2015 but it has been stalled the past five months. The Moving Average Convergence Divergence (MACD) oscillator has been on the defensive since October and is telling us to take profits.
Strategy: I would anticipate a $32 to $40 trading range for PE. A breakout above $40 or below $32 would likely prompt a re-appraisal.