When to Know Cimarex Bulls Have the Upper Hand

We last looked in on Cimarex Energy (XEC) in November, where we wrote, "XEC could trade sideways from here or just continue the upside from the July low. A close below $110 would cause me to rethink a bullish position on XEC." With hindsight we can see that XEC held the $110 level and proceeded to rally to a new high of $130 in January. After that new high prices fell quickly toward $95. With prices back down to the top of the June/July/August bottom pattern a fresh look at XEC is needed.

In this updated Japanese candlestick chart of Action Alerts PLUS holding XEC, below, we can see mixed technical clues. Looking at the price action we can see that the $100 area was acting as resistance in July and August so we are seeing a bit of role reversal as prices find some buying support in the same area. A long lower shadow on the candle chart tells us that buyers rejected the move below $100. Prices are below both the declining 50-day average line and the declining 200-day line....165 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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