We wrote about Range Resources (RRC) earlier this month. At the time, we we said, "I think the upside will win out and RRC will manage to rally in the days and weeks ahead. The advance is likely to be a slow affair. A close below $31 keeps the bear in control."
With hindsight, we can see that RRC only had a feeble upside move in recent weeks, failing at the underside of the declining 50-day moving average line. RRC has closed below $31 -- our line in the sand -- and $30 and $29. The bear is in charge.
In this one-year daily chart of RRC, above, we can see that prices peaked way back in June and have been in a downtrend since. The slopes of both the 50-day moving average line and the 200-day moving average line are pointed lower. There is a belated death cross of these average in November. The On-Balance-Volume (OBV) line peaked ahead of prices in April and May and has declined since and is telling us that sellers of RRC have been more aggressive. The 12-day momentum study in the lower panel is not showing any slowing in the pace of the decline, unfortunately.
In this three-year weekly chart of RRC, above, we can see that prices are below the declining 40-week moving average line. The weekly OBV line is pointed down and the Moving Average Convergence Divergence (MACD) oscillator remains in bearish territory below the zero line.
Bottom line: RRC could continue to work lower to retest the $25 area. It will take a close above $37 now to break the eight-month downtrend line.