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October 23 Chart of the Day - Hess Corporation

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Today, Chevron (CVX) announced  it agreed to buy oil company Hess (HES) in an all-stock deal valued at $53 billion. It’s another major deal in the energy sector, which Chevron said would help support higher shareholder returns.

Typically when an acquisition like this is announced, the purchasing company's stock price declines with the announcement while the target company being bought stock price increases.

In this case we see this to be true on both fronts.

We'll take a look at Hess because it's been trading at or near all time highs (ATH) which can add complexity to trading / investing if you're not already in the stock.  On the monthly chart we can see that price has been seemingly rising parabolically the last three years.

Using price action technical analysis tools and moving down to the weekly chart we can see a channel defined by upper and lower trend lines that price has been within during its ascent.  Additionally, using Fibonacci we can use Fib Sequencing to identify the technically correct price movements this chart has been making.

This can provide upper Fib extension / completion targets in new ATH territory that coincidentally aligns to the previously mentioned channel.

So what's next? 

We don't make predictions...

Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.

  1. Support/Resistance
  2. Trend
  3. Fibonacci 
  4. Supply/Demand Zones,
  5. Change Control Zones

Take a look at the charts and let us know what you think.  

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