Husky Energy Inc. testing support at $32.00

Sep 11th, 2014 – Comment

Since August the stock has met resistance along the 200-day moving average.


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HSE LOGO

Hi Lou,

What are your thoughts on Husky Energy . Where do you see the price heading in the next two months?

Thanks,
Rene

 

Hey Rene,

 

Thanks for the assignment. This will be the third time since 2010 that I have investigated the details at . The last time was on February 8, 2012 on a request from Joe. He wanted to know why the market didn’t like HSE. The research indicated that the company had missed expectations and that will always put a stock in the penalty box. In addition the stock was meeting resistance along the 200-day moving average with further resistance coming in at $27.00. It was advised to be patient and wait for the release of Q4 results scheduled for the next day.

In hindsight that was the right call. HSE began a retreat that pushed it below the 50 and 200 day moving averages and a retest of support near $20.00 by June of 2012. From there the stock began a new two year advance that has taken it to a 52-week high of $37.31 in June of 2014.

Another review of the charts will help identify what might be possible by the end of the year.

 

 

HSE

The three-year chart indicates that HSE is off the highs and testing support at $32.00. The retreat has seen the stock breach support along the 50 and 200-day moving averages and we are in the early phase of a bearish crossover. The next flex point for the shares will come in October when the company will report its Q3 results. How the stock performs as we approach that event horizon will provide some clarity as to direction through the end of 2014.

 

 

 

 

 

 

 

HSE2

The six-month chart illustrates the downtrend that has formed since mid June and the breach of the moving averages. Since August the stock has met resistance along the 200-day moving average. The MACD and the RSI are not generating a strong buy signal at this juncture. I would advocate patience with your decision. Depending on your risk profile, if you are really committed to the story, you can use a portion of your capital to buy now on the assumption that HSE holds support at $32.00. If it catches a bounce as we approach the release of Q3 then you can add to your position.

Make it a profitable day and happy capitalism!

 

 

 

 

 

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