Clicky

CNX Long Entry & Setup

CNX will be added as an Active Long Trade here (for aggressive traders) with an alternative entry for more conventional traders on a break above this descending price channel. On this daily time frame, CNX has at least two potentially bullish developments that have led to trend reversals/rallies in the past: Oversold reading on the RSI (in place) & bullish MACD crossovers (pending). I just came across this setup, have personally taken a starter position, and will follow up with both suggested price targets and stop parameters soon. However, I wanted to get the trade idea posted asap

CNX daily July 15th

CNX daily July 15th

Zooming out to a 10-year weekly chart we can see that over the last decade+, CNX registered only 3 oversold readings (not including the current one), each followed by rallies ranging from 21% to 213%.

CNX weekly July 15th

CNX weekly July 15th

Finally, zooming down to a 60-minute period chart, we can see the recent volume surge which is indicative of a selling climax as the stock approaches that aforementioned 2008 reaction low while deeply oversold on the daily time frame. The bullish divergences in place on this shorter time frame, in addition to the pending bullish MACD crossover on the daily chart point to the fact that a trend reversal is most likely close at hand. Those preferring to wait for a breakout above the daily channel could use this 60-minute downtrend line to hone their entry or add-on to an existing position taken here.

CNX 60 minute July 15th

CNX 60 minute July 15th

I plan to study the charts of CNX as well as crude oil in order to determine just how far the stock is likely to bounce, should it find support here soon. I can say that I still believe that crude oil is in the process of pounding out a long-term bottom with that process quite likely in the latter stages. If so, CNX could potentially morph into a long-term trade lasting many months or possibly years.

0
Jul 15, 2015 1:51pm|Categories: Completed Trades - Long|Tags: |Comments Off on CNX Long Entry & Setup