MEE - Energy Stock

I heard a friend of mine talk about this so I decided to take a look at this stock. If I were trading stocks or options, I typically would not go for a stock this low, however, this is a beautifully traded stock and has lovely patterns.

The traders are very cohesive here, and though going from nearly $95 down to $10 is a pretty steep drop in a half year, losing 90% of its value, I'm not sure if I would've actually played this stock near the bottom. I have no idea what happened to cause such a tumble. However, where it stopped in the downfall is where it opened trading as a stock.

Don't tell me that traders trade randomly, at the least the big traders.

The blue horizontal lines on the chart are some major areas where there was either reversals or hesitations. Right now, we are nearing the $55 mark. As we can see on the volume, bullish volume is decreasing while the price action is moving up. However, MACD is gaining bullish momentum. RSI continues to be in an uptrend.

It's not time to get out yet if you're trading on the monthly chart.

One of the things I would like to note in how I use RSI is everytime a trendline breaks (when it closes beyond the trendline), it's time to reverse directions. Is this true 100% of the time? No. But, the majority of time it is, if you're using only RSI. In my case, I use the EMAs, volume, MACD as my other indicators.

Something that I've learned is RSI's trendlines can get steeper and you can redraw the trendline to be steeper to get out sooner. You could hang on, but sometimes you have to hang onto some retracements.

Price action is overall going up and RSI is trending down on a longer timeframe of over weeks. This signifies bearish divergence, which means that it tells us that it will turn over in the future. When in the future? No clue.

It's been using the 10/20 EMA mainly for support and periodically will pull back to the 50 EMA. Notice the volumes (bullish and bearish) were much stronger in mid-2009. Right now, it seems like those trading it are less interested. So, perhaps some consolidation is coming up.

Of course, if it decides to try for $55, that's about $6 from where it is today, which is $48.67. That's over a 12% move left and still plenty of money to make.
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