Stock Chart Analysis XTEX

Stock Chart Analysis XTEX
Crosstex Energy, L.P. (Public, NASDAQ:XTEX)

Natural gas has been a popular trade this year, particularly by long traders attempting to pick a bottom in the commodity. Despite several attempts at a rally from new lows, the commodity as tracked by the United States Natural Gas Fund, LP (Public, NYSE:UNG) ETF has been in a death spiral for over a year. While UNG has some highly publicized issues of its own, the bottom line is that Natural Gas has been heading lower for the same amount of time with little respite.

What is interesting however, is that some natural gas stocks have been perking up lately, even as Natural Gas continues to struggle near lows. Chesapeake Energy Corporation (Public, NYSE:CHK) for instance, is trading at 11 month highs. One stock that I am watching in this group, is a small cap play that has been working on a base for several months.

XTEX was hit pretty hard during last years market free fall dropping from a base in the $30's down to $1 in just 10 months. XTEX pulled off the lows pretty quickly, and stabilized in the $2-$4 range. XTEX has been gradually tightening its trading range and is in the process of testing the upper bounds of the established base. A move above $4.10 could lead to a full fledged breakout above the base. One of the reasons I find XTEX attractive is the lack of congestion areas above due to the dramatic fall it had last year. If XTEX can get going, it could lead to a surprising surge higher.



Good Trading,

Joey