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When Technicals And Fundamentals Come Together

Offshore

Regular readers will by now be aware that I have a preferred style of trading. It is essentially contrarian and I like to buy things that have been under pressure, but with the caveat that I usually wait until there are signs of a turnaround. That does leave me vulnerable to the occasional dead cat bounce but the damage from those occasions is limited as a result of the new low providing a logical level for a stop loss order. There are a couple of energy stocks that fit that description right now, but Antero Resources (AR) is particularly appealing.

Antero is an old friend that I have used to play fluctuations in energy stocks in the past. The stock has enough volatility to offer a decent potential profit on a move, but enough liquidity to make good fills on stop losses likely. It is, in other words, a perfect trading stock, and it sets up nicely for a buy right now.

(Click to enlarge)

I will admit that at first glance the 1 year chart above gives the impression that only somebody with an intense hatred of money would buy this thing, but that is usually the case with this type of trade. Close things up a bit to look at just the last few weeks, though, and a different picture emerges.

(Click to enlarge) 

This chart strongly suggests that a bottom has been found just above the nice round $20 level and that the long-term direction is in the process of a reversal.

The other thing that my hordes of loyal fans (where is the…

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