Cimarex Energy Co. (XEC) has struggled this calendar year. Prices have edged up this month on declining volume, which is not a vote of confidence. These gains may erode in the coming days as it takes volume to confirm bullish moves. Let's take a closer look at the charts and indicators.
In this daily bar chart, below, we can see that XEC has rallied this month to test the declining 50-day moving average line. Turning your eyes a little to the left and you should see a band of resistance in the $115-$125 area. Notice the decline in volume in July versus June? The daily On-Balance-Volume (OBV) line is flat/neutral for July but also for June -- and that tells me that buyers of XEC have not been accumulating new positions in XEC.
The trend-following Moving Average Convergence Divergence (MACD) oscillator gave a cover shorts buy signal at the end of June and has slowly come up to the underside of the zero line. Crossing above the zero line would be a positive but with the volume being slack I would not be surprised if the MACD oscillator turned lower again.
In this weekly chart of XEC, below, we don't have much in the way of bullish signals to work with. Prices are below the declining 40-week moving average line. The weekly OBV line peaked in December 2016 and turned down to June of this year. There is a small improvement in the OBV line in recent weeks but it isn't all that strong. The weekly MACD oscillator has narrowed a little toward a possible cover shorts buy signal but that may be a number of weeks off if it happens at all.
In this Point and Figure chart of XEC, below, we can see a breakout at $98 and a possible target of $116.00.
Bottom line: A stock can advance without a pattern of increasing volume, but it is more vulnerable to a reversal. Overhead resistance beginning at $115 is a deterrent to an attractive trade. I would stand aside and "keep my powder dry" and look for more attractive opportunities in other energy names. Not every security is a buy.