In an update on Cimarex Energy (XEC) on June 6th we concluded: "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."
If you were a nimble trader you had your opportunity to buy XEC Thursday. Now what?
We can see in this daily chart, above, that XEC just closed below its rising 50-day moving average line. Prices are above the 200-day average line, which is turning up. The On-Balance-Volume (OBV) line is diverging from the price action. Prices recently made a new high but the OBV line has flattened. This divergence tells us that despite prices making new highs, buyers did not show it in the volume. Volume did not expand on days when XEC made new highs closes for the move up.
In this weekly chart of XEC, above, we can see that prices are above the rising 40-week moving average line. The OBV line on this time frame is flattening and momentum is slowing.
Strategy update: if you were nimble enough to go long XEC yesterday at or below $100, I would raise your sell stop to just under $105 from under $100. If there is a quick run back to $120, I would take partial profits. We will continue to watch energy prices and the dollar for our next move.