Prices for Cabot Oil & Gas (COG) gapped higher Monday, breaking above the flat to declining 50-day moving average line and above the rolling-over 200-day moving average line. Sometimes you see an improving technical picture before an upside gap, but that appears to be lacking on COG.
Let's look closer.
In this daily chart of COG, above, we can see prices have moved lower since early October. The November/December recovery halted at the underside of a resistance area ($25-$27). Prices were working lower in December and January, but the gap today is shifting the near-term outlook. COG may or may not close above the 200-day moving average line. Closing above the 200-day line is a positive, but the last rally in December failed in the $24-$25 area, so one mathematical buy signal may not be enough. The volume pattern is not supporting a continued advance and the On-Balance-Volume (OBV) line has been neutral since November. The lower lows in January were matched with higher lows on the momentum study, but this smallish divergence doesn't look big enough to foreshadow a big advance.
This three-year weekly chart of COG, above, does not give us much to go on to anticipate a sustained advance. Today's price action is not shown but the slope of the 40-week moving average line is pointing down. The weekly OBV line is neutral at best and the MACD oscillator is below the zero line.
Bottom line: Without signs of aggressive buying, I don't anticipate today's rally in COG will be long sustained.