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by Kevin Hopson
Brigham Exploration has broken out of an eight-month bullish triangle formation, indicating higher prices ahead.
Position: Accumulate
Kevin Hopson
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.
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TRIANGLES
Brigham Exploration's Triangle Breakout
09/09/03 09:58:58 AMby Kevin Hopson
Brigham Exploration has broken out of an eight-month bullish triangle formation, indicating higher prices ahead.
Position: Accumulate
| Brigham Exploration (BEXP) has been consolidating for nearly eight months after breaking out to a new 52-week high this past January. More specifically, you will notice that the stock was forming a large triangle - a pattern of lower highs and higher lows - up until last week. Since symmetrical triangles tend to be continuation patterns and the long-term trend was up, a break to the upside was a good probability. As you can see, Brigham has now broken to the upside from the bullish triangle formation, thus confirming this theory. |
| So how high will the stock go now that the breakout has taken place? If you take the base of the triangle, or subtract the bottom trendline ($4.40) from the top trendline ($6.00), you come up with $1.60. When you add this number to the initial breakout point ($5.50), the approximate price target is $7.00 and change. As a result, Brigham looks to have additional upside potential in the short-term. |
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| Graphic provided by: Stockcharts.com. |
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| Though the bottom blue parallel line may cap prices in the near-term, this trendline should only act as temporary resistance. Additionally, if the stock price proceeds to pull back, the $5.90 to $6.00 range - site of the stock's prior 52-week high (dotted red line) and the green median line - should act as significant support. As a result, I would look to accumulate shares of Brigham Exploration on a pullback to this price range. |
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: | hopson_1@yahoo.com |
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Date: 09/21/03Rank: 2Comment:
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