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Bullish Pennant Formation for Nexen Inc.05/27/03 10:25:29 AM
by Kevin Hopson
Nexen Inc. recently broke out of a seven-month trading range and is now forming a bullish pennant, indicating a potential move higher in the near-term.
|I touched on Nexen Inc. (NXY) just last week. More specifically, I stated that Nexen's recent channel breakout would likely lead to higher prices in the long-term. Additionally, I recommended accumulating shares on a potential pull back to the $22.00 to $22.50 range, site of the stock's 200-day moving average and the top of Nexen's former trading channel. As expected, the stock found support here.|
|However, Nexen is now showing signs of moving higher again. For example, if you look at the one-year chart, you will notice that the stock has formed a bullish pennant. This is basically a symmetrical triangle or a pattern of lower highs and higher lows, as indicated by the green trendlines. Since this formation tends to act as a continuation pattern and the short-term trend is positive, I believe Nexen will break to the upside in the near-term.|
|Graphic provided by: Stockcharts.com.|
|If so, I think the $23.50 to $24.00 range is an ideal target, as this is site of the 61.8 percent retracement level from the Aug. '02 to April '03 decline and last September's corrective high. As a result, I would continue to accumulate shares of Nexen on any price weakness.|
Kevin has been a technical analyst for roughly 10 years now. Previously, Kevin owned his own business and acted as a registered investment advisor, specializing in energy. He was also a freelance oil analyst for Orient Trading Co., a commodity futures trading firm in Japan. Kevin is currently a freelance writer.
|Glen Allen, VA|
|E-mail address: ||email@example.com |
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Date: 06/03/03Rank: 5Comment: