A while back, I had set up a short in Helmerich & Payne (HP), but now I am actually seeing some reasons to watch for a possible low to develop. Let's start with a weekly chart and compare some swings.
First there is a prior decline that lasted 23 weeks and $60.23. This is very similar to a most recent swing down, which has lasted 24 weeks and $59.71. This swing is very similar to the prior weekly swing. Besides the "symmetry" or similarity of these prior swings, this one projection also overlaps a 0.618 retracement of a rather large swing and a 0.786 retracement of another. These price relationships gave us a general zone of support around the $56-$59 area. If price continues to hold above this general support, I would have to bet on higher prices in this stock just off the technicals. Even a corrective rally could give us 10-30 bucks on the upside.
If this is a more important low, the upside potential is much healthier, in that case. I can't tell you for sure whether or not a major low will develop from around this area. But I can tell you that if this area does hold, the potential is truly there. Our risk can be defined below the key support, somewhere under the $55 area. Let's take a look at the daily chart next.
As far as the daily chart is concerned, the pattern is still bearish and considering the buy side is definitely a counter trend setup. For those reasons, if it does not play out, don't marry it...just get out and wait for the next setup instead. The only reason why I will consider this is because of the bigger picture scenario that the weekly chart is showing us.
Now, for fine tuning a possible entry, let's look at the 30-minute chart. On the 30-minute chart, I have set up a pullback to the most recent low. The larger general area comes in at the $61.95-$65.58 area. The area within the larger zone I'm interested in comes in at the $64.08-$58 area.
It's hard to say if that "ideal" support will be tested, though. Bottom line, I would look at any buy triggers against this larger pullback zone, and will define my maximum risk below the Dec. 16 low. You could also define risk below the low that is made prior to any buy trigger you take. Let's see if HP has any legs here!