NEW YORK (TheStreet) -- Good day traders!
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1. First, lets look at Ivanhoe Energy, the heavy oil development company.
On Wednesday, Ivanhoe regained the minimum bid price compliance rule for the Nasdaq listing, and it shows with above average volumes.
Ivanhoe closed up 18.52% on Friday, closing at $1.92.
- Friday's range: 1.55 - 2.33
- 52-week range: 1.31 - 6.93
- Friday's volume: 4,679,280
- 3 month average volume: 400,473
Ivanhoe energy has been a great swing trade in the recent past. On Aug. 29, shares traded within a 110% trading range, and closed up nearly 52% on that day. In the days that followed, investors took their profits, and Ivanhoe traded back down 30%. These are huge percentages for just a few days. Keep this in mind if you choose to trade Ivanhoe, it fluctuates very fast, and you can win big or lose big, so manage the trade properly and set a sell stop.
From a technical standpoint, Ivanhoe is in a long term downtrend, without a doubt. Although, it appears that the sentiment is changing with the big moves it's had over the last few trading sessions. On Friday, shares traded back up over the 50-day simple moving average and formed a candlestick that "almost" engulfed the previous day's candle. Friday's candle also "almost" formed the fifth candle in a "rising method" candlestick signal. I say "almost" because I believe candlestick signals are not always textbook. Also, the chart has formed a flag type signal.
Additionally, Ivanhoe's volume is more than 11 times the 3 month average. Lastly, Ivanhoe is a rounded bottom breakout, one of my favorite chart patterns. These are all signs of good trade potential.
I'd look to enter this trade above the 50-day simple moving average at $1.89. I'd set a sell stop according to your own risk tolerance, but if it closes below Friday's candle I'd be out. I would target the 200-day SMA, which can be a 64% move to the upside. Stay long until you see a confirmed sell signal, or a close below the t-line.
I love the energy sector, as it offers a wide range of trade types, from quick to long-term moves.
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