How to Trade EQT: Our Updated Strategy on the Natural Gas Play

Let's check the longer-term trends of the stock.

In our April 15 review of natural gas plays we recommended a long position in EQT Corp. (EQT) . After the close of trading Tuesday the company announced they were purchasing Appalachia assets for $5.2 billion in cash and shares and would double their stock buyback program. Let's check the longer-term trends of the stock.

In the daily bar chart of EQT, below, we can see that the shares rallied strongly from mid-April to early June followed by a correction down into early July. Another strong move higher carried prices to a new high in late August. Prices are trading above the rising 50-day moving average line and above the rising 200-day line.

Trading volume has weakened slightly since late March. The daily On-Balance-Volume (OBV) line shows a peak in late May followed by a soft decline. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but pointed down.

 

In the weekly Japanese candlestick chart of EQT, below, we can see that the shares are in a longer-term uptrend above the rising 40-week moving average line.

 

The weekly OBV line shows a long-term bullish rise to confirm the price gains. The weekly MACD oscillator is above the zero line but narrowed towards a potential crossover sell signal.

 

 

In this daily Point and Figure chart of EQT, below, we can see a downside price target in the $41 area.

 

 

In this second Point and Figure chart of EQT, below, we can see that the software is projecting a $76 price objective.

 

 

Bottom-line strategy: Traders who are long EQT should continue to hold those positions. Risk to $39 now. Traders who are flat EQT could go long on strength above $52. The $76 area is our price objective.

 

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