05/06/2022
The market continues to get hammered and then you hear about a company with a share price that’s doubled… tripled… or even quadrupled…
They’ve been hard to come by and to be frank, once they get found, you’ll see folks piling in to drive the price up even more.
(Source: giphy.com)
I’ve definitely had that feeling.
I don’t want to add to it, but here’s one that won’t stop plugging away…
This is Earthstone Energy Inc. (ESTE).
Above is the daily chart from the initial breakout.
I know what you’re thinking… “Why not me?!”
The truth is that no one ever knows, hence the risk aspect of the market. We have zero control over what happens once we put on a position.
But ESTE can be traded in a number of ways to get a piece of the action, so let’s look closer…
The hourly gives a closer look in terms of buy zones and resistance (green and red horizontal bars).
And right now, the price action is leading lower with printed Divergent Bars (orange candlesticks) and a red ATR Baseline (green to red price channel) per Chris Hood.
The bars forecast a highly probable move lower within the next 4-5 bars…
…just remember, this is the hourly.
The green horizontal channels show that local support is in the low-to-mid $13.00’s, so this is the area to watch if you’re looking to go long.
If this gives out, the next line of support (red X) is extremely thin and I’d check the daily for the next level of buyers or scale into a short position.
However, using Chris’s Squeeze Trading Tool 1.0, the histogram tells us that ESTE could be rounding out to run higher soon despite there being no squeeze…
For longs, the key resistance to break to new highs is located at the blue arrow on the daily chart.
Considering the relative strength compared to the movement in the indices, this is one to keep on watch…
Keep moving,
(Disclosure: I hold no position in ESTE.)
This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.
