SM Energy To Tank Further

SM Energy Company stock prices have been tanking since early September and have left investors wondering. We will now delve into its charts and try and find out what promise the stock holds for the coming few weeks.



We can see a clear bearish butterfly formation on the stock chart which preceded the fall in prices from around 90 levels to its current closing price of 73.16. This was definitely one of the major technical factors causing the huge drop in the last month. What we now need to find out is what to expect from the chart at this juncture. Is it time to go long ? Or should we wait for prices to drop further. We take a look at another popular analysis technique, the Camarilla Pivots.


Take a close look at the last bar on the chart. The close at 73.16 is below the L3 pivot level of 74.41, which is a major support line for the entire month of October 2014. Though it is usual for stocks to bounce from these levels, it is likely that prices will tank further since it has already entered strong bearish territory. Depending on the strength of the downward move, SM Energy could drop till the next Camarilla support level of 70.82 or even further till 64.83.


Wolfe Wave patterns as depicted in the above chart also depict a gloomy picture. With stock prices clearly below a major trend line (shown in yellow), we can expect major drops in SM Energy stock prices in the coming trading sessions. It may also be noted that there are no major supports to hold the prices from dropping further.


On a larger scale, a look into weekly charts for SM Energy again depict that a Bearish bat formation is already in place and could be a major driving factor for pushing stock prices further down for the next few weeks.

Clearly, the days ahead are not very bright - it is definitely advisable to avoid long positions at the moment although one could keep accumulating the stock at various support levels. Lets keep a watch on SM Energy and wait for the right time to pick it up.

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1 comment:

  1. Closed at 60.98 !! SM Energy clearly did fall !!!

    ReplyDelete