Pioneer Natural Resources (PXD) looks poised for a recovery rally. Traders who know how to get in and how to get out may want to review the charts and indicators.
In this daily bar chart of PXD, below, I see a downward trend from November. Prices trade below the declining 50-day moving average line and below the bearish 200-day moving average line. The trading volume has increased the past four to five weeks and could represent a shift from weak hands to strong hands.
The On-Balance-Volume (OBV) line shows weakness from June and confirms the price decline. The 12-day price momentum study shows higher lows from December even though prices made lower lows. This is a bearish divergence and can at times foreshadow a rally.
In this weekly Japanese candlestick chart of PXD, below, I see a promising looking setup. Prices are in a downward path but a recent lower shadow below $180 tells me that traders are rejecting the lows.
The weekly OBV line shows only modest weakness the past year. The 12-week price momentum study shows equal lows in February and March for a small bullish divergence.
In this daily Point and Figure chart of PXD, below, I can see that the software is projecting an upside price target in the $223 area.
In this weekly Point and Figure chart of PXD, below, I can see a potential downside price target in the $134 area.
Bottom line strategy: Aggressive traders could go long PXD on a weekly close above $196 for a rally to the $220-$225 area. Risk to $185.
