Shares of Cimarex Energy (XEC) made a low in January/February in the $80 to $70 area followed by a nice rally, but what is in store for this energy name?
In this daily chart of XEC (above), we can see the dips below $80 earlier this year that were buying opportunities. Prices rallied above the 50-day moving average line in March and the 200-day average in April. In May we had a crossing of the 50- and 200-day for a bullish golden cross. The On-Balance-Volume (OBV) line has been supportive since the January low. But, we have a bearish divergence between the higher price highs and the weaker momentum readings in April and May.
In this weekly chart of XEC (above), we can see that prices have rallied above the 40-week moving average, which now has a flat slope. The OBV line has been pointed up in recent months, telling us that the buyers have been aggressive. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line and bullish.
With momentum weakening on the daily chart we could see a dip to $110 or a touch lower. This might be a good buying opportunity with a sell stop below $100.