Exco Resources

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An oil and gas player that insiders are snapping up a large amount of stock in is Exco Resources ( XCO), an independent oil and natural gas company, engages in the exploration, exploitation, development, and production of onshore U.S. oil and natural gas properties with a focus on shale resource plays. Insiders are loading up here into weakness since this stock is down over 30% so far in 2012.

Exco Resources has a market cap of $1.5 billion and an enterprise value of $3.35 billion. This stock trades at a reasonable valuation, with a price-to-sales of 2 and a price-to-book of 1.15. Its estimated growth rate for this year is -101.8%, and for next year it's pegged at -300%. This is far from a cash-rich company, since the total cash position on its balance sheet is $30.57 million and its total debt is a whopping $1.92 billion. This stock sports a dividend yield of 2.4%.

A director and beneficial owner just bought 700,000 shares, or around $4.74 million worth of stock, at $6.57 per share.

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From a technical perspective, XCO is currently trading above its 50-day moving average and below its 200-day moving average. This stock recently traded down to around $6.20 a share, where it subsequently found buying interest that has now pushed it back above its 50-day moving average of $6.91 a share. That move has now pushed XCO within range of triggering a near-term breakout trade.

If you're bullish on XCO, then I would look for long-biased trades once this stock breaks out above some near-term overhead resistance at $7.20 a share with high-volume. Look for volume on that move that registers near or above its three-month average action of 6 million shares. If we get that action soon, then I would target a spike back towards its next significant overhead resistance level at $8.20, or possibly even its 200-day moving average of $8.75 a share.

I would simply avoid XCO or look for short-biased trades if it fails to trigger that breakout, and then drops back below its 50-day moving average of $6.92 a share with high-volume. If we get that action, then XCO will likely re-test and possibly take out its next significant support zones at $6.40 to $6.23 a share.

Exco shows up on a recent list of 25 Energy Stocks to Considers.

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