At the end of July we were neutral on Action Alerts PLUS holding Cimarex Energy Inc. (XEC) saying, "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."
In the past three weeks not much has changed as XEC is just about at the same price it was at the end of July and the daily On-Balance-Volume (OBV) line is still pretty flat and not signaling more aggressive buying. Ignoring volume-based indicators however, the price based indicators on XEC have improved. Let's look at the latest charts and indicators.
In this updated daily bar chart of XEC, above, we can see that prices retested the July lows when it pulled back in early August. Buyers came with increased volume and pushed prices briefly back above $100. Prices are now above the flat 50-day moving average line but still below the declining 200-day line. The OBV line has been neutral since mid-June.
The trend-following Moving Average Convergence Divergence (MACD) oscillator has just crossed above the zero line for an outright go long signal on this timeframe.
In this weekly bar chart of XEC, above, there has been some technical improvement over the past three weeks. Prices are still below the declining 40-week moving average line. The weekly OBV line has moved up, unlike the daily line. A rising OBV line suggests that buyers of XEC have become more aggressive with heavier volume traded in weeks when XEC has closed higher.
In the bottom panel of this weekly chart is the MACD oscillator, which just crossed to the upside for a cover shorts buy signal (a buy signal when the stock is still in a downtrend).
In this updated Point and Figure chart of XEC, above, we can see some accumulation in the low $90s and a possible upside price objective of $123.
Bottom line: I would still like to see a stronger OBV line on the daily chart, but aggressive traders could probe the long side risking a close below $95. Investors should risk a close below $90. Price targets are $115 and then $123.