Noble Energy (NBL) had a fourth-quarter 2015 selloff, but recovered this year. Prices have been stuck in a sideways range bracketed by $34 below and $38 above. This period of sideways price action has turned the 50-day and 200-day moving averages flat. Let's drill deeper.
In this daily chart of NBL, above, we can see that volume has been declining this year -- and did not increase with the first-quarter price rise. The On-Balance-Volume (OBV) line did improve during April, but has been declining since early May. The math behind the OBV line is simple: If the stock closes higher, we add the volume to cumulative running total. If the stock declines, we subtract the volume. More volume on down days will give you a downtrend in the OBV line and suggests that sellers are more aggressive.
Prices made higher highs in April and then June, but the 12-day momentum study shows lower highs -- or weakening momentum. This tells us that the power behind the rally is fading.
In this three-year weekly chart of NBL, above, we can see the big decline over the past two and a half years. Big declines often need big recovery periods to repair the damage. Markets rarely turn overnight.
Prices are above the flat, 40-week moving average line, but volume has been declining since the low made earlier this year. Declining volume with rising prices is not a textbook bull-market picture. Chartists like to see volume increase with a trend -- and confirm and validate it.
The weekly OBV line (middle panel) has barely crept higher this year and doesn't fit the picture of strong accumulation. The Moving Average Convergence Divergence (MACD) oscillator, after well over a year below the zero line, has finally moved over the zero line. Unfortunately, it looks like the oscillator is crossing to a new sell signal.
Bottom line: A close below $34 with an increase in volume will turn the short-term trend down, and a retest of the $30 to $28 area could develop after that. A close above $39 with increased volume is needed to turn the charts bullish again.