Houston-based oil and gas exploration and production company, Par Pacific Holdings Inc. (NYSE: PARR) seems to be ready for an upmove in the near term as per its latest charts.
#1 Falling Wedge Pattern: The daily chart shows that the stock has been forming a falling wedge pattern during the past few months. This is marked in blue color in the daily chart. The stock is currently near the bottom of this falling wedge pattern. If the stock breaks out of the top of the falling wedge pattern, it can move higher in the near-term.
#2 Channel: The stock has also been trading within a channel during the past several months. This channel is marked as green dotted lines in the daily chart. The bottom of the channel acts as a good support level.
This is a bullish sign.
#4 CCI Oversold: The CCI is currently below -100, indicating that it is oversold.
This usually means that the stock may reverse to upside soon.
#5 Fibonacci Level Support: Usually, after an up-move, stocks retraces to any of the key Fibonacci levels before surging back again.
PARR has currently taken support at the 50% Fibonacci support level of the upmove, as seen in the weekly chart. This is a good demand area as well. So, this seems like a good point for the stock to bounce back up.
#7 Oversold RSI: The RSI in the weekly chart is currently nearing oversold levels, indicating a possible upmove in the near-term.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for PARR is between the price range of $16.70 to $17.20.
TP: Our target prices are $23 and $30 in the next 3-6 months.
SL: To limit risk, place a stop loss at $15.70. Note that this stop loss is on a closing basis.
Our target potential upside is 34% to 80% in the next 3-6 months.
- Entry at $16.70: For a risk of $1.00, our target rewards are $6.30 and $13.30. This is a nearly 1:6 and 1:13 risk-reward trade.
- Entry at $17.20: For a risk of $1.50, our target rewards are $5.80 and $12.80. This is a nearly 1:4 and 1:9 risk-reward trade.
In other words, this trade offers nearly 4x to 13x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the falling edge pattern and channel support level with high volume. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in its sector.
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