Range Resources (RRC) is one of many energy plays whose share price suffered in 2014 and 2015. Energy prices have recovered and so has the share price of RRC. A low was made in early 2016, and since then prices have more than doubled. RRC has been correcting those gains since June.
Is RRC ready for a new leg to the upside? Let's check the charts and indicators.
In this twelve-month bar chart of RRC, below, we can see the lows being made in December, January and February. RRC jumps to life in early March -- spiking above the rising, 50-day moving average line. There is a bullish golden cross of the 50-day and 200-day average lines in late April, before prices stall and top out in June.
The On-Balance-Volume (OBV) line is positive, and moves up with prices in the first half of 2016, but it turns lower thereafter. The OBV looks like it has turned flat in November. The daily Moving Average Convergence Divergence (MACD) oscillator signaled a cover-shorts buy in mid-November, and crossed above the zero line for an outright go-long message later in the month.
In early December, RRC closed above the still-declining, 50-day simple moving average line, and just closed above the rising, 200-day line. The chart above shows a bearish death cross of these averages in November, but I doubt the signal is going to be successful.
In this three-year weekly chart of RRC, above, we can see both the big decline and the recovery so far. RRC has rallied above the 40-week moving average line, and closed back below it. Prices have rallied back to just below the now-rising, 40-week line -- and could close above it again.
The weekly OBV line made a low in December 2015 -- and has shown some improvement, but nothing table pounding. The weekly MACD oscillator is below the zero line, but is poised for a cover-shorts buy signal, as the two lines of this indicator have narrowed.
Strategy: I anticipate that energy issues will do better in the first half of 2017. The correction that RRC has seen since June could be over, but I would like to see more aggressive buying and a rising OBV line. Meanwhile, I still favor the upside, and aggressive traders who are able to risk a close below $32 could buy RRC here and add on a close above $42. A rally to the $60 to $65 area could be seen by mid-2017.