Questerre Energy – QEC.TO has been on my public list for quite some time. This year I traded it twice and got stopped out. QEC.TO – Questerre Energy is now looking good again. The one thing that would make it look much better would be volume confirming price action. Today the stock is gapping up and breaking out to the upside. The prior consolidation can now be labeled as a bullish wedge. A divergence won’t stop prices from moving up. On the other hand a confirmation helps generate more sustained and explosive moves.
What makes the stock and the natural gas sector technically interesting is the fact it is the exact opposite of a ‘crowded trade’. Everybody hates natural gas and natural gas related stocks. UNG – United States Natural Gas ETF has burned plenty of traders and I removed UNG from my public list a while back because of contango issues and the ETF not replicating natural gas prices properly.
Today’s news that XOM – Exxon Mobil is acquiring XTO – XTO Energy could be an event that I like to call a ‘shift in sentiment’. Today’s gaps and bullish candles within the sector could set up the charts for a new trend. We might have witnessed the start of a new prolonged move to the upside. It is too early to tell if we are to see a true bull market develop but the fact we are trading near historic lows is a plus. Natural gas not being a crowded trade doesn’t hurt either. The name of the game always remains the same: Stick to the charts. They tell the story.
A quote from today’s XOM – Exxon Mobil news sums it up quite well:
“Natural gas is trading at historical lows. Exxon is making a bullish statement about natgas prospects, and if others agree, you could see more deals like this, but only time will tell”
Check my Natural Gas Sector Overview Chart for more natural gas trading ideas like FCG – First Trust Natural Gas ETF and CHK – Chesapeake Energy. You can easily compare relative strength of single stocks within the sector.
Up-to-date QEC.TO – Questerre Energy Chart on my public list.
Have a great evening!
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