Cabot Oil & Gas ( COG) gaped to the upside earlier this month but then the rally stalled at its December highs and have subsequently weakened. Will COG remain range-bound or do we need to be prepared for more weakness?
Let's look closer at the indicators and charts to see if we can glean any insights.
In this one-year daily chart of COG, above, we can see that both the December rally and the February rally stopped in the bottom half of the resistance zone from $24 to $26.50 back in June to September. The slope of the 50-day moving average line looks like it is rolling over similar to the 200-day moving average line.
The On-Balance-Volume (OBV) line declined with prices in August through November but it went sideways since December so we are not getting clues that buyers of COG have turned aggressive. The Moving Average Convergence Divergence (MACD) oscillator just crossed to a liquidate longs sell signal.
In this updated three-year weekly bar chart of COG, above, we can see that prices have slipped below the slightly declining 40-week moving average line. It looks like COG could retest the $20 level. The weekly OBV line has been flat the past three to four months and the MACD oscillator has been stuck below the zero line in bearish territory.
In this Point and Figure chart, above, we can see that COG has made higher lows from $18.50 to $22.00. A trade at $21.00 breaks this pattern but gains to $25.00 keeps things pointed upward.
Bottom line: I feel like I need to be the Oracle of Delphi and give advice that could be taken as bullish or bearish. If COG holds and does not trade down to $21 I can be modestly encouraged but it will take strength above $25 to get me more excited about COG.
