As oil hits a new five-year low, it can be easy to let emotions keep you from seeing trading opportunities in energy names. This is exactly where technical analysis can work best because it simply looks at pricing history to help determine possible pricing in the future. But Profit Scanner powered by Recognia has identified a short-term pattern in LinnCo LLC (NASDAQ:LNCO), an energy holding company, that could have traders banking some sweet profits before Valentine’s Day.
LNCO owns shares of Linn Energy (LINE), which is an independent oil and gas company, as 100% of its invested capital. For longer-term investors, it’s important to note that LNCO’s dividends are taxable, and the company issues a 1099 instead of a K-1 at year end. But for shorter-term traders, if the bullish Head and Shoulders Bottom pattern plays out in 24 trading days as expected, you could be tagging out with profits in a few weeks.
At the Dec. 31 close, Profit Scanner identified the bullish Head and Shoulders Bottom pattern on LNCO’s chart with significant volume of 5,217,274 shares traded.
LNCO opened today at $9.88 and has already risen about 10% on the day – but the pattern has an upside target of $15.00 to $16.00 if it resolves as expected, so there’s plenty of room to room.
What makes this trade in LNCO especially attractive is that resistance doesn’t occur until $30.24, meaning there is no psychological or historical price “ceiling” for the shares until that point, which means they are free to run. If the $15.00 to $16.00 target is hit, traders may wish to take partial profits there while leaving some shares in place for a potential run up. Support is at $10.34, so traders can use that as a very conservative stop loss, or Profit Scanner provides a looser stop at $8.21.
Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.
