Here’s some levels Scott is watching on $DEN – November 3, 2022


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This is Scott with your Chart of the Day. The market has been volatile the last couple of days but there is one sector that has been holding up pretty well, and that is the energy sector XLE ( NYSEARCA: XLE ).

As you can see XLE ( NYSEARCA: XLE ) had a nice move off of its 50-day moving average, that’s the red line, a little bit of a backtest, and then a strong move higher. And even with all of the stuff coming out of the Fed and what the market did yesterday XLE ( NYSEARCA: XLE ) did not break trend and held above its daily 8 exponential period moving average.

Today we got a classic upside reversal coming on higher-than average-volume. And so that brought me to take a look at some energy stocks here tonight, and I am looking at Denbury ( NYSE: DEN ). Now, DEN ( NYSE: DEN ) did announce earnings this morning. They ended up having a beat and the market rewarded them with a strong move off of the 50-day moving average.

Again, the same kind of story, it comes down to the 50-day moving average. Once it gets support it tends to have a nice move higher. And so we have a clear support level right at that 50-day moving average. And then we have a nice downward-sloping trendline from the high back here in October. It is a pretty clear channel, we know what the stock has to do. It’s got to get above that level, stay above that level, and ideally do it on higher than average volume.

Now, the one thing I don’t like about this chart today is the fact that even though it had a good earnings report the volume was kind of lackluster. That is probably because anyone who was holding the stock didn’t really feel like selling it. And anyone who was looking to put risk on probably doesn’t want to put too much on, based on a lot of headline stuff that is going on right now in the market.

But if we get a strong move through this level coming on volume, I think that could help Denbury ( NYSE: DEN ) continue this little uptrend. So it is definitely a stock that I am watching, and maybe you can add it to your watch list as well.

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