Parsley Energy (PE) is a relatively new name in the energy sector but it spent much of 2015 basing and this year investors are harvesting the results.
In this daily chart of PE, below, we can see the upside breakout begin in late February. Prices climb steadily until an upside gap pushes prices up even faster. Prices are above the rising 50-day moving average line and tests of the line in May, June and July were buying opportunities. The 200-day average line has a positive slope, too.
The On-Balance-Volume (OBV) line made its low in February and has gone up, confirming the rally ever since. The Moving Average Convergence Divergence (MACD) oscillator turned down in August giving us a liquidate longs sell signal and recently the MACD went below the zero line for an outright sell signal.
In this weekly chart of PE, below, we can see the base around the $16 level that started in late 2014. Volume increased through the base, which often happens when investor confidence increases. Prices start to break out on the upside in early March and continue to rise steadily from there. The slope of the key 40-week moving average line turned positive in October 2015.
The OBV line on this weekly timeframe shows a strong rise the past year, which suggests that buyers have been aggressive in buying PE -- trading more shares when the stock closed the week higher. The MACD oscillator has been above the zero line all year but a liquidate longs sell signal appears to be signaled.
Looking to get long PE? The stock is likely to have a $31 to $35 trading range for a while before the next sustained move higher. Traders should use available weakness in the trading range to initiate or increase their positions.