Hess (HES) has made a strong-looking base pattern the past three years. Is this the time to gas up with a long position? Let's put away the green and white toy Hess truck and get serious with the charts.
In this daily bar chart of HES, below, we can see that during the past twelve months dips below $42 have been bought. There is a dip below $42 in June and that is when the daily On-Balance-Volume (OBV) line turns up. Buyers of HES started to become more aggressive. The OBV line continued to rise from June into April with higher lows and higher highs. HES is above the 50-day average line and the 200-day line though the first one is declining and the latter is rising. In late December we can see a bullish golden cross of these two indicators as the 50-day line crossed above the 200-day line. In the lower panel of this chart we have the Moving Average Convergence Divergence (MACD) oscillator. The oscillator gave a cover-shorts signal in February and moved above the zero line last month for an outright go-long signal.
In this weekly bar chart of HES, below, we can see a two-year base pattern. Prices are above the rising 40-week moving average line. The weekly OBV line made a low in August and has strengthened since. The weekly MACD oscillator turned bullish in January.
In this Point and Figure chart of HES, below, we can see an upside price objective of $65. A trade at $56 would be a fresh breakout.
Bottom line -- HES shows a lot of upside potential. The question is where to go long and what to risk. If HES pulls back towards $50 it could be bought risking below $46. If there is no pullback and HES rallies above $55 and $56 it is another place to go long risking below $48.
