Apache Needs a Rally Above $44 to Chase the Bear Away

Apache (APA) was reviewed just a few weeks ago when it was upgraded by our quantitative service. In late January I wrote, "If you followed our advice from our last update (Aggressive traders could go long on strength above $47 looking for intermediate-term gains to the upper $50's. Risk a close below $42.), you should be long APA. My target is the $56 area for starters." This recommendation was certainly not my best work as APA quickly declined to $36.  Ouch. How do prices look now?

In this daily bar chart of APA, below, we can see that what was looking like a decent bottom formation from August was just upset by the new lows this month. Last month prices were above the rising 50-day average line and now they are below the declining 50-day average. Volume has not increased significantly in recent weeks so I cannot say that sellers are being more aggressive. The On-Balance-Volume (OBV) line has declined since late January but it has not made a new low like prices have done. The slow stochastic indicator shows that prices are very oversold but that does not mean they can or should rally....130 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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