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Today, we’re recommending a new bullish trade on Anadarko Petroleum (NYSE:APC). Oil prices climbed to new 52-week highs this past week, and it appears prices are going to remain strong in the early part of 2017.

Saudi Arabia is reporting that it has cut its oil production, which should bring the country in line with the limits it agreed to with the Organization of the Petroleum Exporting Countries (OPEC). This puts APC in a wonderful position to increase its profits.

A rise in oil prices will enable APC to not only realize more profits from its current production and production facilities it will be able to bring back online, but also generate additional profits from new exploration and production.

On a technical level, APC is on the verge of completing a bullish “wedge” continuation pattern by breaking out of the consolidation range it has been in since mid-December.

We expect the stock to break out of this range shortly and push up above the recent 52-week high of $73.33 that was set on Dec. 12. Based on the height of the bullish wedge, we expect the stock to rise toward $75.

‘Buy to open’ the APC February 72.50 Calls (APC170217C00072500) for a maximum price of $2.85.

You can learn more about identifying price patterns and using them to project how far you think a stock is going to move in our Advanced Technical Analysis Program.

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