The charts and indicators of Noble Energy, Inc. (NBL) are flashing a number of buy signals. Let's review the charts for a strategy to hopefully capitalize on the next leg higher while suggesting a risk point.
In this daily bar chart of NBL, below, I can see a variation of an inverse head and shoulders bottom formation. Use your imagination to see a left shoulder in June/July. See a head in August and a right shoulder in November/December? The volume pattern is not "textbook" but how many times are things really textbook?
At the end of December NBL started to rally to break the neckline around $29. Prices closed over the 50-day moving average line and its slope turned positive. The 200-day average line was broken and it is flattening now. A bullish golden cross of the 50-day and 200-day averages could happen any day now. The On-Balance-Volume (OBV) line made its bottom in August and has improved the past five months signaling some more aggressive buying. The Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in late December adding to the buy signals.
In this weekly bar chart of NBL, the bottom pattern is more like a large double bottom. Prices are above the flattening 40-week moving average line. The weekly OBV line has been rising since May and the weekly MACD is just now crossing the zero line for an outright go long signal.
In this Point and Figure chart, below, we can see a key breakout at $29.22. A $44.74 price target is shown.
Bottom line: I like the array of buys signals for NBL. Aggressive traders could go long NBL around $32 risking a close below $29 for now, while looking for a longer-term move to the mid-$40's.
