
ConocoPhillips Extends Breakout, but Momentum Is Fading
NEW YORK (TheStreet) -- ConocoPhillips (COP) - Get Report managed to hold on to a slight gain on Wednesday, and its seven-day winning streak remained intact. Before fading in the afternoon, ConocoPhillips was up more than 22% from its Sept. 29 low.
This impressive rally has been fueled by steadily increasing volume, especially this week as the stock began to move past the September high. In the very near term, though, the rally is becoming a bit stretched and may need to consolidate soon. A pullback to support will set up a very low-risk entry opportunity for patient bulls.
ConcoPhillips began this week with a powerful upside gap. This breakout move pushed the stock past a very heavy resistance area with a great deal of momentum. ConocoPhillips continued higher on Tuesday and Wednesday, but with shares stretching the gain off the Aug. 24 low to more than 35%, a rest is needed to maintain the bullish trend.
A fade back down the the $52-to-$51 area would do the trick.
Patient investors should focus on the support zone now in place near the September and August highs. This key area runs from $52 to $51. Slightly above the September peak, at $51.19, is the powerful breakout gap left behind on Monday morning. If ConocoPhillips drifts back down to this area as it consolidates the post-Aug. 24 rally, a low-risk buying opportunity will develop.
From a solid base here, the stock will be set up well for a fresh rally leg that could carry it back up to its 200-day moving average near $60.
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Disclosure: This article is commentary by an independent contributor. At the time of publication, the author was long COP.









