In the oil and natural gas space, the Trending123 Pattern Scan powered by Recognia has revealed two trades at opposite ends of the spectrum—one bullish, one bearish. The Recognia system identifies technical patterns and target prices, which are included below should you be interested in these names for stock or options trading.
Click to Enlarge The price for Kosmos Energy (KOS), an oil and gas exploration company operating in Africa, seems to have reached a bottom. The stock is showing signs of a bullish reversal as it has broken upward after a period of uncertainty or consolidation.
The diamond bottom pattern generally begins during a downtrend as prices create higher highs and lower lows in a broadening pattern. Then the trading range gradually narrows after the highs peak and the lows start trending upward. When the price breaks upward out of the diamond’s boundary lines, it marks a significant reversal to a new uptrend.
Price Target: $11.15 – $11.30
Bearish Symmetrical Continuation Triangle
Click to Enlarge Penn West Petroleum’s (PWE) price has broken downward out of a consolidation period, suggesting a continuation of the prior downtrend. A symmetrical continuation triangle shows two converging trendlines as prices reach lower highs and higher lows. Volume diminishes as the price swings back and forth between an increasingly narrow range reflecting uncertainty in the market direction. Then well before the triangle reaches its apex, the price breaks down below the lower trendline with a noticeable increase in volume, confirming the pattern as a continuation of the prior downtrend.
Price Target: $7.50 – $8.00
InvestorPlace advisor John Lansing tracks the charts all day and offers expert technical analysis in his day trading, options and trading services: Power Trading at the Open, Parabolic Options and Trending123. Trending123 members receive access to the Trending123 Pattern Scan powered by Recognia free as part of their membership.