Apache (APA) made a decent rally in the second quarter, but it looks like prices are poised to roll over and correct to the downside in the weeks ahead.
In this daily chart of APA, above, we can see the small January/February bottom. Prices popped to the upside in early March, rallying over the 50-day and 200-day moving average lines. In April, there was a golden cross of those two popular averages. The On-Balance-Volume (OBV) line turned up in March, supporting the bull case. Despite these positive signals, there is a bearish divergence between the higher highs in price in March, April and May and the weakening momentum readings. Prices look poised to test and maybe break the 50-day moving average.
In this weekly chart of APA, above, we can see prices are above the 40-week moving average, which now has a positive slope. The OBV line on this time frame is neutral, but the MACD oscillator is bullish and has risen above the zero line. APA could pull back under the $50 mark and maybe see the upper $40s. At the moment, this looks like a buying opportunity, and a sell stop below $45 seems like a good risk point.
