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Truth is timeless: “Markets never change” – Jesse Livermore, 1923 The early masters, Livermore, Wyckoff and Loeb isolated themselves from the crowd and crowd thinking. None of them ever graduated high-school and yet they each became legends in the market. Their techniques have been time-tested.... More
  • Magnum Hunter: Initiated Long 0 comments
    Feb 18, 2014 12:41 PM | about stocks: C

    Magnum Hunter Resources Corporation (MHR) moved up on solid volume at the last session (2/14/14) and is continuing the advance today.

    We initiated a long on MHR at 8.99 with the expectation that the trade is in the green at the close. In addition, we are looking to see that our stop of 8.84 is not threatened in this session or those to come.

    (click to enlarge)MHR Daily

    Charts by TeleChart

    We have a tight stop (of 15-cents/share) as is typical for the trading techniques being used. MHR looks to be in the process of an impulsive breakout. If that assessment is correct, price action has a low probability of returning to today's low of 8.84.

    Any breakdown of this assessment will result in an immediate exit.

    Pulling out to the monthly chart, we can see a trading range that has developed over four years.

    Taking this range and developing a measured-move target gives MHR the potential to reach the 32 - 35 area.

    (click to enlarge)MHR Monthly

    Charts by TeleChart

    There is an upcoming earnings release on 2/28/14 (pre-market) for MHR. The trade will need to be well in the green to allow some protection from an adverse move as a result of the earnings release.

    After the close:

    The following is an update to the MHR long entry.

    The daily chart below shows that MHR closed at 8.92, which is 7-cents below our entry. Not what was desired. The stop remains at 8.84.

    (click to enlarge)MHR Daily Close

    Charts by TeleChart

    Price action in MHR closed above the previous resistance area of 8.81 and this is a bullish sign. Note the blue arrows indicating higher closing prices. Volume contracted for the day and in this instance, that is another bullish indication.

    Had volume increased to be more than the previous session and the day's range be narrower, that would indicate distribution.

    Anything can happen in the market and if the next session stops us out, so be it. The loss will be a miniscule 15-cents/share and allow us to wait on the sidelines and determine the next course of action.

    Disclosure: I am long MHR.

    Stocks: C
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