Diamondback Energy Inc. - (FANG) - October 11, 2023
This morning, ExxonMobil (XOM) announced a surprise $60B acquisition of Pioneer Natural Resources (PXD) which may attract renewed investor interest to the US oil patch on speculation that a new round of consolidation may be beginning.
Looking through the S&P 500 Index Report at Oil & Gas Producers in the Green Favored Zone, Diamondback Energy (FANG) has the highest increase in rank over the last month (up 28 positions to 62nd place), and the highest SMAX score. Other Green Zone producers include Marathon Petroleum (MPC), Targa Resources (TRGP), Williams Companies (WMB) and EOG Resources (EOG). There also are several service and mid/downstream companies in the Green Zone.
Diamondback Energy has been steadily climbing up the rankings in the SIA S&P 500 Index Report since July, when it exited the red zone. In August it returned to the Green Favored Zone for the first time since May and it continues to work its way up the relative strength rankings with a gain of two spots yesterday. Diamondback Energy (FANG) has bounced back dramatically in the last week. In a recent correction, bears were unable to keep the price below $145.00, confirming that a recent breakout point and former resistance level has reversed polarity to become support. Since then, bulls have come back in with the shares staging two breakaway gaps in a row.
Currently, FANG is retesting resistance in the $159.00 to $160.00 area. A drive through there to a new high would signal the start of a new upleg with next potential resistance in the $173.00 to $175.00 area based on a combination of measured moves and a round number.
After staging a strong advance through 2022, Diamondback Energy (FANG) spent the first half of this year trending sideways while consolidating previous gains. Since July, the shares have been under renewed accumulation. In August, FANG staged a rare bullish Spread Quintuple Top breakout, and recently retested the breakout point near $143.75 as new support which remains in place today.
In the recent Energy sector correction, FANG only staged a 3-box reversal, a sign of continuing underlying support and it has already rolled back up into an X column. A breakout over $158.75 would complete a bullish double top, a bullish catapult and signal the start of a new upleg.
Initial resistance appears at the November 2022 peak near $165.15, followed by $178.75, $197.35, and $209.45 on trend, all of which are based on horizontal or vertical counts.
With a perfect SMAX score of 10, FANG is exhibiting strength across the asset classes.
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