Could This Energy Stock Bounce Off Support?
Helmerich & Payne, Inc. engages in contract drilling of oil and gas well. It operates through the following segments: North America Solutions, Offshore Gulf of Mexico, International Solutions, among others.
Take a look at the 1-year chart of Payne (NYSE: HP) below with added notations:
Chart of HP provided by TradingView
HP has formed an important level of support around the $37 mark (green). The stock has rallied off that mark multiple times this year but now appears to be declining back down to it. Even though the stock may bounce off support again, if the $37 level were to break, much lower prices might follow for HP.
The Tale of the Tape: HP has a key support area around $37. A trader could enter a long position at or around the mark with a stop placed under it. If the stock were to break below the support, a short position could be entered instead.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT