Dallas-based midcap oil producer Denbury Inc. (DEN) emerged from bankruptcy in September 2020. Various media reports now suggest that the company could be a big winner of the Biden administration's climate bill, due to its carbon dioxide (capture) business. Other reports hint at a takeover by Exxon Mobil (XOM) . Who knows?
Let's check out the condition of the charts and indicators.
In the daily bar chart of DEN, below, I see a choppy sideways trading pattern. The shares have been bouncing off the rising 200-day moving average line in September and January but downside corrections have been deep or lengthy.
Trading volume has not been increasing to show us that investor interest is increasing. The On-Balance-Volume (OBV) line has weakened from the middle of October and the Moving Average Convergence Divergence (MACD) oscillator has struggled to move above the zero line.
In the weekly Japanese candlestick chart of DEN, below, we don't have our typical three years of price history. Prices are above the 40-week moving average line and recent lower shadows tell us that traders rejected the lows around the intersection of the 40-week line.
The weekly OBV line has declined the past five to six months. The MACD oscillator is pointed lower.
In this daily Point and Figure chart DEN, below, we can see a downside price target in the $81 area.
In this weekly Point and Figure chart of DEN, below, I can see an upside price target in the $113 area. A trade at $79.05 could weaken the picture.
Bottom-line strategy: I am not in favor of going long DEN. Trading volume is on the low side. And we don't have enough trading history to draw good conclusions. Things may improve from here so I am open to revisiting the charts again.
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